TMI Blog2011 (7) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as 'allowances and depreciation' have also been used - The Apex Court pointed out that the expression 'expenditure' as used in Section 37 of the Income Tax Act, 1961, cover an amount which is really a 'loss' even though the said amount has not gone out from the pocket of the assessee - Therefore, set aside the order of the Tribunal in this regard and direct the Tribunal to consider the claim of the assessee in respect of sum of Rs.4,75,307/- as to whether the said claim can be considered as a trading loss in the light of the decisions of the Apex Court. - 267 of 2005 - - - Dated:- 26-7-2011 - Mrs.Justice CHITRA VENKATARAMAN, Mr.Justice M.JAICHANDREN, JJ. For Appellant : Mr.C.V.Rajan for M/s.Subbaraya Aiyar For Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the amounts were not written off in the books of accounts. In the absence of details available, the appeal filed by the assessee was rejected by the Commissioner of Income Tax (Appeals). 4. Aggrieved by the same, further appeal was preferred by the assessee before the Income Tax Appellate Tribunal. The Tribunal however rejected the claim of the assessee following the order of the Tribunal dated 27.2.2004 passed in ITA.Nos.2391 and 2392 of 1992, preferred by the Joint Receivers of the firm in which the appellants were partners, wherein the Tribunal had taken the view that the assessee had not written off the said amount as bad debt in the books of accounts and hence, the claim could not be sustained. Aggrieved by the same, present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egards the maintainability of the appeal. The Tribunal held that the assessee herein was entitled to maintain the appeal in terms of Section 247 of the Income Tax Act. Thus having entertained the said appeal, the Tribunal followed its earlier order dated 27.2.2004 passed in ITA.Nos.2391 and 2392 of 1992, in the appeals preferred by the Joint Receivers of the assessee's firm. 7. As far as the merits of the present appeal is concerned, learned counsel for the assessee submitted that even though the assessee had not written off in the accounts the amount due from the debtors as required under Section 36(vii) of the Income Tax Act, nevertheless, the claim could be considered under the other provisions available under the Act viz., Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the Tribunal had already considered the claim in the assessee's appeal preferred by the Joint Receivers and when the admitted fact is that the assessee had not written off the time barred debt or shown that the assessee had no claim on the amount due from the agents, apart from not being written off in the books of accounts as bad debt, the question of considering the same as trade loss for the purpose of deduction does not arise. 12. Heard learned counsel for the assessee as well as learned standing Counsel appearing for the Revenue. 13. As far as the Revenue is concerned, there is no dispute raised and rightly so, as regards the maintainability of the appeal by the assessee. A perusal of the order of the Tribunal and that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said services, the assessee undertook to pay the finance company from whom the Corporation got the lorries under the hire purchase scheme, a sum of Rs.21,240.30 towards insurance premium and advance payment for the vehicles. The assessee had the services of the Transport Corporation for two years. During the third year in 1963, there was no transport by the Corporation for the assessee. There was a default by the Corporation in paying the hire charges to the Finance Company. The assessee intervened and paid the instalments to the Finance Company on behalf of the Corporation. During the year ending 31st March 1963, a sum of Rs.2,19,431/- was outstanding from the Corporation to the assessee. due to difficult financial position of the Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, express or implied, in the Act. " 17. The decision of the Apex Court in the case of C.I.T. v. WOODWARD GOVERNOR OF INDIA P. LTD - 254 ITR 312, is a case relating to loss suffered on account of fluctuation in the rate of foreign exchange. The Apex Court granted relief as an item of expenditure under Section 37(1) of the Income Tax Act, 1961. In dealing with expression 'any expenditure' as used in Section 37 of the Income Tax Act, the Apex Court pointed out that the expression covers both expenses incurred as well as an amount which is really a 'loss' even though such amount has not gone out of the pocket of the assessee. In so holding, the Apex court referred to the decision in the case of MADRAS INDUSTRIAL INVESTMENT CORPORATION LIMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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