TaxTMI 
TaxTMI 
2011 (2) TMI 284
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....1. 2. The first ground is that the CIT(A) erred in deleting the addition of Rs. 27,97,170/- made on account of bad debts. The brief facts in this connection may be noted. In the Profit and Loss Account for the year, the assessee wrote off the bad debts. In the course of the assessment proceedings the assessee was asked to justify the claim. The assessee replied that since the net worth of the debtors was eroded because of huge losses, there was little chance of recovery and, therefore, the assessee decided to write off the debts. This explanation was not acceptable to the Assessing Officer. According to him, the assessee fell short of establishing the debts to have become bad. He was of the view that except the unilateral ac....
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....were however not allowed as the assessee failed to give any reason for writing off these debts. 4. The revenue has come in appeal questioning the decision of the CIT(A). There is a mistake in the ground. The amount of bad debts actually allowed by the CIT(A) was only Rs. 27,21,800/- as noted above. The ground should accordingly read that the CIT(A) erred in deleting the addition of Rs. 27,21,800/-. In respect of the balance of Rs. 75,370/-, consisting of three debts, the CIT(A) has actually confirmed the disallowance. There is no appeal by the assessee. 5. The revenue is in appeal. Its contention that these are not bad debts but are advances made to the two companies for the development of website and, therefore, they ca....
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....in which it was held that in such a situation Rule 27 would apply. Reliance is also placed on the judgment of the Hon'ble Bombay High Court in CIT vs. Gilbert & Barker Manufacturing Co., USA (1978) 111 ITR 529 (Bom). In these judgments it has been held that the subject-matter of an appeal should be understood not in a narrow and unrealistic manner but should be so comprehended as to encompass the entire controversy between the parties which is to be adjudicated upon by the Tribunal. The Hon'ble Justice S Ranganathan, speaking for the Delhi High Court observed that : "But in a case where there are inter-connected grounds of appeal and they have impact on the same subject-matter, the scope of the appeal should be broadly considered ....
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.... first appellate authority under section 250. The subject-matter of the appeal, as noted by Hon'ble Justice Ranganathan in the judgment of the Delhi High Court cited supra is different from the grounds of appeal taken before the Tribunal. In the present case the subject-matter of the appeal is the allowance of the claim for deduction of the amount of Rs. 22,21,800/-. It is therefore open to the assessee, as respondent, to support the ultimate decision of the CIT(A) though on a different ground, namely, that it should be allowed properly as business loss. Rule 27 thus cannot come in the way of the assessee putting forth its claim, in the department's appeal, that the amount should be deducted as business loss. In the light of these judgments....
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....the assessee had advanced Rs. 5,00,000/- in the year 2000 for the development of website. Ultimately the idea was abandoned but the assessee's efforts to recover the money by sending several reminders did not yield any result. In this case also the Board considered the matter and taking into account the financial position of the above company, resolved to write off the advance. The orders of the income tax authorities thus show that all the facts which were necessary for the adjudication of the assessee's claim that the amount should be allowed as business loss were before them. It was on those very facts that the assessee had unsuccessfully claimed for allowance of the amount as bad debt. On those very facts it had put forth the alternativ....
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....n ITA No: 6847/Mum/2008, in the case of M/s Pik Pen Private Limited vs. ITO. There advances were made for the purchase of machinery, which was not supplied. The assessee wrote off the advances and claimed deduction as revenue expenditure, which claim was allowed by the Tribunal. In the present case, we are of the opinion that even if the websites had materialized, the expenditure could not have been viewed as capital expenditure because the website is put up for the purposes of day-to-day running of the business and even if one were to view that some enduring benefit is obtained by the assessee, the benefit cannot be said to accrue to the assessee in the capital field. A website is something where full information about the assessee's busin....