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2009 (2) TMI 283 - HC - Income TaxQuestion relating to bills discounting facility – submission that income accrues to the assessee only when the assessee receives the bill value at the end of the period of bill or earlier and that accounting system 9.4 is mandatory and there would not be certainty only at the date of discount, is acceptable - question regarding bad debt - Tribunal was right in holding that the transaction of discount is complete at the moment, the customer is given 90 per cent. of the value of the bill. The discount is equivalent to the interest and it accrued at that point. Tribunal was right in concluding that the uncertainty regarding the discharge of the bill or rediscounting has no relevance - In the present case, the debts are shown as written off on the basis of the formula given by the Reserve Bank of India. Writing off of the debt as bad requires judgment on The part of the person carrying on the business but, in the present case, the debts evidently have been “written off” merely on the basis of the Reserve Bank of India norms and nothing more. So they were not deductible u/s 36 – In respect of lease equalization charge, when these charges were debited according to the RBI guidelines and when the department also admitted it, the amount could not be added back to profits of company under section 115JA
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