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2018 (9) TMI 1313 - AT - Income TaxAddition towards write off of rent deposits - whether not in the nature of a revenue loss allowable as a deduction? - Held that:- Rental advance in the given case, is not unrecoverable but it was adjusted towards agreed rent for lock in period as per agreement between the assessee and landlord. Therefore, in our considered view, the assessee has taken conscious decision to vacate the leased property and as per agreement, assessee has obligation towards lock in period as per the lease agreement. Therefore, the negotiated settlement for the lock in period can only be treated as business loss as the premises was taken on rent for the purpose of business. The facts in the case of Triveni Engg. Industries Ltd. (2010 (9) TMI 26 - DELHI HIGH COURT) were that the company was amalgamated and in the amalgamated company, advances given for securing the premises could not be recovered. Therefore, the unrecovered advances of rent was not allowed as revenue in nature. But, in the given case, it was recovered and settled for the rent for lock in period. Therefore, it is distinguishable on facts to the case of the assessee. Hence, the grounds raised by the assessee are allowed.
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