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2017 (6) TMI 494 - AT - Income TaxAddition of provision for certain doubtful debts u/s 36(i)(vii) - Held that:- Upon perusal of statutory provisions, we find that any expenditure laid out or expended wholly and exclusively for the purposes of business shall be allowed provided that same is not personal expenditure or capital expenditure and not of the nature covered by Section 30 to 36. However, prime condition to claim the same is that the expenditure, at the first instance, must have crystallized during the impugned AY before which the same could be claimed by the assessee and this factor, in our opinion, is missing in the instant case. Upon perusal of documents placed on record, we find that the assessee could not produce any evidence to show that the suppliers refused to pay the outstanding amount or denied their liability in any manner which can lead to a conclusion that the impugned provision crystallized during the year. The expenditure to be admissible, at the threshold, must be capable of being classified as an expenditure at the first instance and deduction of mere provisions / estimation could not be allowed to the assessee unless provided by the statute. On the same analogy, the same is not admissible either under Section 28(i). Therefore, to conclude, we hold that the impugned expenditure, being mere provisions, were not allowable to the assessee which results into dismissal of all grounds of assessee’s appeal.
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