Bad debt deduction and treaty treatment for a London branch remanded for fresh assessment after reconsideration of applicable law.

The claim for deduction on bad and doubtful debts was not finally decided on the merits; it was remitted to the Assessing Officer for fresh consideration in accordance with law. The reassessment must take into account the applicable provisions governing bad debts and the Double Taxation Avoidance Agreement in relation to the London branch, so the treaty position forms part of the reconsideration exercise. The assessment issue was therefore sent back for a new decision after applying the relevant legal framework.

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Issues: Whether the claim for deduction relating to bad and doubtful debts required fresh consideration by the Assessing Officer, and whether the Double Taxation Avoidance Agreement had to be taken into account in relation to the London branch.

Analysis: The appeal did not result in a merits determination of the deduction claim. The matter was sent back for reconsideration in light of the applicable provisions governing bad debts and the treaty position relevant to the London branch.

Outcome: The assessment issue was remanded to the Assessing Officer for fresh decision in accordance with law after considering the Double Taxation Avoidance Agreement.

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