Section 36 Bad debt allowability

[Lakshmi P]

My company is an nbfc.during the previous financial years it gave loan to illiterate customers based ustomers of kyc and signature,later it was found that article given as security in fact was stolen.and customers themselves were not knowing that they were taking loan.pawn brokers in actuals were taking the loan.now it officer siting third party fraud and there by disallowing the same.kindly help with case law

AI Summary

NBFC's Bad Debt Claim Denied for Loans Secured with Stolen Collateral; Seeks Legal Precedent and Police Complaint Status. A company, functioning as a non-banking financial company (NBFC), provided loans to customers who were unaware they were taking loans, as pawn brokers were actually securing the loans using stolen articles as collateral. The tax officer has disallowed the bad debt claim, citing third-party fraud. The company seeks assistance with relevant case law to address this issue. A participant in the forum suggested inquiring whether a complaint has been filed with the police regarding the use of stolen properties as security.