https://www.taxtmi.com/caselaws?id=276657 Whether debts and advances written off by the assessee qualified as deductible bad debts under section 10(2)(xi) turned on characterisation: the court applied the test that deductible bad debts must be trading debts arising in the course of business and recorded in the profit and loss account under the mercantile system, and not capital outlays. The managing agency agreement did not compel advances and the record showed no link between recovery and the agency's profit-earning process; accordingly the advances were characterised as capital outlays and not allowable as bad debts. en-us Mon, 29 Oct 1962 00:00:00 +0530 Thu, 15 Nov 2018 12:30:57 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=276657 Whether debts and advances written off by the assessee qualified as deductible bad debts under section 10(2)(xi) turned on characterisation: the court applied the test that deductible bad debts must be trading debts arising in the course of business and recorded in the profit and loss account under the mercantile system, and not capital outlays. The managing agency agreement did not compel advances and the record showed no link between recovery and the agency's profit-earning process; accordingly the advances were characterised as capital outlays and not allowable as bad debts. Case-Laws Income Tax Mon, 29 Oct 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=276657