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2018 (5) TMI 508 - AT - Income TaxAdvances written off by the assessee - business loss allowability - Held that:- FAA held that same could be allowed as per provisions of section 28 of the Act i.e. as a business loss and that the assessee had not produced sufficient evidence to support the claim. As gone through the details available on pages 173,180-181 of the Paper book. The nature of the advances clearly prove that the assessee had advanced certain amounts for business purposes only. Advances to the employees or advances made for cylinders have to be held to made for carrying out business of the assessee. As far as genuineness of the expenditure is concerned,we find that the AO and FAA have not held that sums were not advanced. The expenses were of revenue nature. As there was direct and intimate relation between the advances made and the business of the assessee,same has to be allowed as regular business expenditure u/s.37 of the Act. It can also be allowed as business loss as per section 28.In short, advances written off cannot be disallowed in any manner.- Decided in favour of assessee.
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