TMI Blog2014 (10) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... n force for the AY 1994-95 also – decided against revenue. Bad debts written off u/s 36(1)(vii) and 36(2) – Held that:- CIT(A) and Tribunal was rightly of the view that the advance was given by the assessee to its associate company was in the course of its banking business - the advance made to the associate company was lost only on account of security scam in AY 1993-94 which resulted in the market crashing and consequent losses of the associate company - when the assessee advanced money to its associate company, it could not have foreseen that it would not be recoverable - in any banking business, there are a lot of considerations involved in making advances and merely expressing doubt about the genuineness of the advance is not suffic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the advances to D.B. Financial Services (India) Ltd. were not made in the ordinary course of assessee's banking business and therefore such write-off was not allowable as per the provisions of Sec 36(2) of the Income Tax Act. (3) Whether on the facts and circumstances of the case and in law, the ITAT is correct in deleting the addition of ₹ 1,03,29,545/- on account of discounts earned on Bills of Exchange purchased without appreciating the fact that the assessee's claim of those expenses (discount earned) were in the nature of expenses incurred in violation of the provisions of law and hence the same were not allowable as per provisions of explanation to Sec 37 of the Income Tax Act. (4) Whether on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Review Petition, the Revenue contended that Section 44C of the Act had undergone an amendment in Assessment Year 1993-94 and, therefore, the decision rendered for the Assessment Year 1984-85 would not have any application. 4. This Court dismissed the Review Petition by an order dated 26th March 2013. The Court held that the Respondent-Assessee was governed by the Double Taxation Avoidance Agreement (DTAA) entered into between Federal Republic of Germany and India on 28th June, 1984. The aforesaid agreement provides that the deduction in respect of head office expenses allowable would not be less than what is allowable under the Indian Income Tax Act as existing on 28th June, 1984. Thus the head 'office expenses' was deductab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciate company. Thus, the CIT(A) held that when the Respondent-Assessee advanced money to its associate company, it could not have forseen that it would not be recoverable and therefore, allowed the Respondent-Assessee's appeal. On further Appeal by the Revenue, the Tribunal upheld the finding of fact arrived at CIT(A). The Tribunal inter alia recorded in the impugned order that in any banking business, there are a lot of considerations involved in making advances and merely expressing doubt about the genuineness of the advance is not sufficient to take away discretion of the bankers to make advance. Thus, the appeal of the Revenue was dismissed by the impugned order. 8. We find that on the above issue, there are concurrent findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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