https://www.taxtmi.com/caselaws?id=766841 The Delhi HC ruled against the assessee regarding bad debt deductions. The assessee, a lender, claimed bad debts when borrowers defaulted on guaranteed amounts. ITAT initially allowed the deduction, finding the guarantee business-related and commission unrecoverable due to borrower's financial distress. However, HC reversed this decision, agreeing with AO and CIT(A) that the arrangement was a colorable device to transfer losses within the group. The court noted the borrower company made Rs. 10 crores donation despite claiming inability to pay, indicating deliberate non-recovery. HC held bad debt conditions under Section 36(1)(vii) weren't satisfied, ruling in favor of Revenue. en-us Tue, 25 Feb 2025 00:00:00 +0530 Wed, 05 Mar 2025 07:49:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=766841 The Delhi HC ruled against the assessee regarding bad debt deductions. The assessee, a lender, claimed bad debts when borrowers defaulted on guaranteed amounts. ITAT initially allowed the deduction, finding the guarantee business-related and commission unrecoverable due to borrower's financial distress. However, HC reversed this decision, agreeing with AO and CIT(A) that the arrangement was a colorable device to transfer losses within the group. The court noted the borrower company made Rs. 10 crores donation despite claiming inability to pay, indicating deliberate non-recovery. HC held bad debt conditions under Section 36(1)(vii) weren't satisfied, ruling in favor of Revenue. Case-Laws Income Tax Tue, 25 Feb 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=766841