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2009 (12) TMI 100 - HC - Income TaxBad debts – bad debts in respect of money landed to subsidiary company – bad debts in the course of business - The subsidiary company paid back the outstanding principal amount of Rs.7,50,000/- but there was an outstanding interest of Rs.4,13,567.22. The assessee also had shares in the subsidiary company which were sold after the subsidiary company faced difficulties. The assessee also stood as a guarantor for the credit facilities granted by the bank to the subsidiary company. In view of the transfer of the shares belonging to the assessee in the subsidiary company, the said company thereafter ceased to be a subsidiary company. Inspite of the fact that the advances have been made by the assessee in favour of the subsidiary company to prop-up the sagging business, the same could not be run - Therefore under those circumstances, the assessee has written off the loans advanced to the subsidiary company in his book of accounts as bad debts for the assessment year 1989-90. The assessing officer in the assessment passed under Section 143 (3) read with Section 251 of the Income Tax Act, 1961 has disallowed the bad debts claims for a sum of Rs.25,98,579/- CIT(A) and ITAT allowed the claim the bad debts - held that - First Appellate Authority as well as the Tribunal have considered the materials on record and came to the conclusion that the transactions involved are true and genuine. They have also held that the advances have been made during the course of the business and they have become irrecoverable as bad debts and hence the assessee is entitled to the benefit under Section 36 (1) (vii) of the Income Act, 1961. The said decision being based upon the findings of fact, the same cannot be agitated before this Court. – revenue appeal dismissed
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