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2022 (4) TMI 1308 - AT - Income TaxAllowability of claim of advances written off - only grievance of the revenue is that assessee had not offered any income in terms of section 36(2) of the Act in earlier years and hence, the said claim when written off, is not allowed as deduction under section 36(1)(vii) - HELD THAT:- Once a trade advance was given in the normal course of business of the assessee and that the said trade advance becomes irrecoverable and consequently, when the same was written off by the assessee as irrecoverable, the same would only be a business loss for the assessee allowable as deduction under section 28 of the Act and provisions of section 36(2) r.w.s. 36(1)(vii) would not come into operation. Hence, we direct the Assessing Officer to grant deduction on account of trade advances written off. Accordingly, the ground raised by the assessee in this regard are allowed.
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