1981 (10) TMI 104

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....e either as bad or doubtful debts or as trading loss for the year ended 31st March, 1974 and (2) Whether the sur-tax payable was a deductible expenditure for the computation of profits for the year ended 31st March, 1974. 2. On the question of sur-tax being deductible expenditure the Madras Benches of the Tribunal had been taking a consistent view that it is not a deductible expenditure. The ld....

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....e for the asst. yr. 1975-76, but it has not become bad as on 31st March, 1974 and hence should not be allowed as a deduction for the asst. yr. 1974-75. The ld. counsel for the assessee contended before us that in view of the Sick Textile Undertaking (Taking over Management) Act, 1972 and in view of the subsequent event of the nationalisation of the four debtors mills w.e.f. 1st April, 1974 the lia....

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.... (Taking over Management) Act, 1972 the Central Government took over these four mills w.e.f. 31st October, 1972 and moratorium was issued. As per the Sick Textiles Undertaking (Taking over Management) Act the Central Government had undertaken to manage these mills and the expenditure relating to such management have got priority. It is fairly conceded by the department that the liabilities of thes....

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.... in the case of LMB Pvt. Ltd., Bombay wherein it was held that in respect of a debt due from a sick mill, apart from bad debts even the doubtful debts can be written off. The main contention of the Deptl. Rep. is that the assessee could not have anticipated the Sick Mills Undertakings Ordinance of 1972 and also the Act of 1974 which gave retrospective effect from 1st April, 1974 and so the assesse....