TMI Blog2013 (8) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuant to the order of the Reserve Bank of India. Assessee-company, thereafter, had written off the balance - Therefore, expenditure were needed to be spent by the assessee for the purpose of carrying on its business and are incidental to the business, therefore, any loss shall have to be considered as the revenue cost and not the capital cost - Following decisions of Ramchandar Shivnarayan v. CIT [1977 (11) TMI 2 - SUPREME Court] and Indian Aluminium Co. Ltd. v. CIT [1972 (3) TMI 1 - SUPREME Court] - Decided against Revenue. - TAX APPEAL NO. 579 of 2012 - - - Dated:- 25-3-2013 - AKIL KURESHI AND SONIA GOKANI , JJ. For the Appellant : Varun K. Patel. For the Respondent : Manish J. Shah. ORDER:- PER : Akil Kureshi Chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank for the said purpose. The assessee had fixed deposited the sum of Rs. 20,60,293/- with Visnagar Nagrik Sahakari Bank Ltd. and the shares worth Rs. 15,00,025/- lacs were also produced. Balance in the current account was to the tune of Rs. 6,160/-. For the year under consideration, Reserve Bank of India ordered the liquidation of the said bank and the company had written off the balance of fixed deposit, equity share and balance in the current account, in all, to the tune of Rs. 35,66,478/-. When it claimed deduction from the business profit, the Assessing Officer was of the view that this claim was not acceptable. This was so done relying on various decisions of the courts and further more, it also held that there was no clarity as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled principles to the facts of the present assessee. This was essentially the investment needed to be made by the parties of carrying on the business without which could not have obtained the contract of the Government. 5. On thus considering submissions of both the sides and also on examining the material on the record, we are of the opinion that no interference is required. As could be noticed from the record, requirement was of the Government to furnish the bank guarantee from the nationalized bank or the scheduled bank. The Assessee had availed such bank guarantee facilities from the Visnagar Nagrik Sahakari Bank Ltd. and the sanctioned limit of such bank was of Rs. 2 crores. The prescribed norms of the bank had noted the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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