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2020 (6) TMI 270 - KARNATAKA HIGH COURTDead loss v/s bad debts - investment made by the assessee in a sister concern for purchase of equity shares which into liquidation - HELD THAT:- From perusal of the order passed by the assessing officer, it is evident that assessing officer has not examined the fact whether or not the assessee has entered an amount as written off as bad debt. From the order passed by the Commissioner of Income Tax (Appeals) also it is evident that he has not recorded a specific finding that the assessee had written off the debt in the books of account. Tribunal also has not recorded a specific finding by assigning reasons that in the books of account the debts have been written off. Only in a single sentence, it is stated that the assessee had in its books of account written off its debt as irrecoverable. Entitlement benefit of capital loss - The issue with regard to loss of shares in a company, which went under liquidation was considered by Gujarat High Court in CIT VS. JAI KRISHNA [1997 (2) TMI 65 - GUJARAT HIGH COURT] and it was held that a person who gets nothing on account of liquidation of a company and suffers loss, his loss has to be treated as capital loss by virtue of Section 46(2) of the Act. The tribunal has followed the aforesaid decision and has held that the assessee is entitled to benefit under Section 46(2) of the Act in respect of an amount for diminution of value of investment made in Gujarat Instruments Ltd - sister concern. We concur with the view taken by Gujarat High court. The impugned order passed by the Income Tax Appellate Tribunal is modified and the finding that the assessee is entitled to the benefit of capital loss is set aside. The matter is remitted to the assessing officer who shall decide the same in the light of law laid down by the Supreme Court in the case of T.R.F [2010 (2) TMI 211 - SUPREME COURT] - In the result, both the substantial questions of law are answered accordingly. In the result, the appeal is disposed of.
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