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2018 (2) TMI 1091 - AT - Income TaxSection 80G disallowance - Held that:- We are of the opinion that both the lower authorities have erred in law as well as on facts in this peculiar circumstances to interpret the relevant statutory provision Section 80G of the Act in an unsustainable manner which tantamounts to denying the necessary relief in both assessment years i.e. the year of actual payment as well as that of getting the necessary donation receipt. The purpose of using the crucial expression “in relevant previous year” in statute is to ensure actual payment on or before the relevant previous year rather than altogether rejecting a case alike the instant facts only. We therefore accept assessee’s first substantive ground to delete the impugned Section 80G disallowance under challenge. Disallowing of claim of sundry balances - Held that:- We find that Peninsular Plantations Ltd. vs. ACIT [2014 (4) TMI 214 - KERALA HIGH COURT] holds that such a specific money lending clause is not necessary as it is very much possible for a company to lend money to another entity even in absence of a money lending clause. Their lordships are of the view that the test in such a case would be as to whether the transaction in question has taken place in ordinary course of business or not. The assessee’s above referred evidence sufficiently indicates that it had proposed to charge interest on the advances in question given through banking channel. We conclude that the money in question advanced as per its above object clause or for that even in absence of object clause amounted to a transaction in its ordinary course of business only. Both the lower authorities corresponding finding by this effect accordingly stand reversed. Treating the impugned write off as a capital loss and not revenue in nature so as to be deposited against income of the impugned assessment year - Held that:- As assessee has advanced the sum in question of ₹ 60lacs and ₹ 40lacs to M/s. Bhagyam Industries Pvt. Ltd. and M/s. Dolphin Metal (India) Ltd. totaling to ₹ 1 crore through banking channel in its ordinary course of business in lieu of charging interest and non recovery thereof for almost three years formed sufficient reason to write them off as sundry balances as revenue loss to be adjusted against its income of the impugned assessment year. The assessee’s second substantive ground is accordingly accepted.
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