Transfer pricing comparables and adjustments: Tribunal revisits loss-maker status, segmental comparability, working capital relief, and risk allocatio...
Business expenditure disallowance failed where commission, related-party salary and promotion payments were supported by records and inquiry was inade...
Bad debt deduction depends on an effective write-off, not on a mere provision for bad and doubtful debts after the Explanation inserted from 1-4-1989. Where the assessee debited the amount to the profit and loss account and made corresponding entries treating the debt as irrecoverable, the write-off requirement was substantially satisfied, even though the individual debtor's ledger was not formally closed because recovery litigation was pending. The pendency of recovery proceedings explained the absence of ledger closure and did not convert the claim into a bare provision. Any later recovery would remain taxable in the year of recovery. On that basis, the deduction was allowed and the disallowance was set aside.
Bad debt deduction depends on an effective write-off, not on a mere provision for bad and doubtful debts after the Explanation inserted from 1-4-1989. Where the assessee debited the amount to the profit and loss account and made corresponding entries treating the debt as irrecoverable, the write-off requirement was substantially satisfied, even though the individual debtor's ledger was not formally closed because recovery litigation was pending. The pendency of recovery proceedings explained the absence of ledger closure and did not convert the claim into a bare provision. Any later recovery would remain taxable in the year of recovery. On that basis, the deduction was allowed and the disallowance was set aside.
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