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Income Tax - Highlights / Catch Notes

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Advances to subsidiary company – Allowability as bad debt – the ...

Income Tax

May 26, 2014

Advances to subsidiary company – Allowability as bad debt – the loss of advance by the assessee company to its 100% subsidiary company is to be allowed as a business loss - AT

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  1. Deletion of disallowance of bad debts/ advances written off – Allowability to deduct the losses and debts of subsidiary company – claim allowed - AT

  2. Business loss or Bad Debts - written off of advances – advances given for material supply – held as business loss instead of bad debts - claim allowed - AT

  3. Claim of bad debts – advance given for purchase of capital assets are not allowable as bad debts/business loss - AT

  4. Loss on pictures - bad debts - the assessee has claimed to incurred Loss due to non-recovery of advances and therefore, claimed it as loss which is not impermissible under the law.

  5. It is not necessary for an assessee to establish the debts to have actually become bad - Disallowance in respect of loss on advances written off allowed - AT

  6. Bad debts u/s. 36(1)(vii) - business advances given to subsidiary company which has become irrecoverable - the loss on account of non-payment of advance of subsidiary...

  7. Allowance of of bad debts - advances given by the assessee had become actually bad - deduction u/s 36(1)(vii) cannot be denied - HC

  8. Advances made to rural branches of bank – Whether deduction u/s 36(1)(viia) can exceed the amount of provision for bad and doubtful debts - Held no - AT

  9. Bad debts - Allowability towards service tax which was written off as bad debt u/s. 36(1)(vii) - Since service tax payment recovery is denied by the DIP, the assessee...

  10. Bad debts - Advance given to Subsidiary Company for Job work - The subsidiary company was in absolute financial stringency and there was no possibility of any recovery...

 

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