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2021 (11) TMI 578 - BOMBAY HIGH COURTDeduction u/s 36 (1) (vii) - ITAT allowing pure loan as Bad debt - respondent could not be said to be in the business of banking or money lending and therefore the principle amount of deposit/advances to MCCL could not be claimed as deduction u/s 36 (1) (vii) on account of condition placed in condition 36 (2) - whether amount written off consisted of capital loan and interest in an integral manner and thus condition prescribed in Section 36(2) got fulfilled? - HELD THAT:- Advances of deposit is to be understood as having been done in the ordinary course of business. Therefore, one of the condition required under Section 36 (2) (i) of the Act, i.e., bad debts or part thereof taken into account in computing income of the assessee for an earlier Assessment Year before such debt or part thereof is written off is satisfied. Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. The appeal is devoid of merits and it is dismissed with no order as to costs. We have not opined on the second part, i.e., whether or not the assessee is engaged in the business of money lending or banking since we have confirmed that respondent is entitled to deduction on bad debts in view of first part of Section 36 (2) (i) of the Act.
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