HC held that the assessee's pledging of shares to enable a group...

HC held that the assessee's pledging of shares to enable a group company to obtain a loan constitutes a bona fide business activity. The loss incurred through share pledging and subsequent settlement is eligible for deduction as a bad debt. The court affirmed that when an assessee records an amount as a business loss in accounting records, it prima facie establishes the loss as non-recoverable. The revenue department failed to provide cogent reasons to challenge the deduction. The decision emphasizes that expenditures made for commercial expediency and indirect business facilitation can be considered legitimate business expenses, thus allowing the tax deduction for the claimed bad debt.