2013 (1) TMI 44

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....ons imposed by the Government of Nigeria, is a capital loss or trading loss? 3. At the outset, we may observe that in the impugned order passed by the Tribunal dated 27th May, 2002, this core issue has not been decided and we are of the considered opinion that even facts of the case have not been properly appreciated, much less appreciation of the contention of the parties. However, facts of the present case are that the Assessing Officer made several additions and many of the additions were in respect of bad debt. The assessee company claimed bad debt of Rs.2,28,57,374/. The Assessing Officer asked the assessee to explain as to how this amount had become bad debt. The assessee's contention is that in accordance with the provision of Feder....

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....in appeal before the Commissioner of Income Tax (Appeals), Ranchi. The appellate authority held that the respondent's claim could not be considered under section 36(1)(vii) of the Income Tax Act. However, the appellate authority held that the Assessing Officer was correct in holding that there is no element of bad debt in whole of the transaction. The respondent transferred certain assets to the Nigerian company for utilization in that company but due to certain restrictions imposed by the Nigerian Government, they lost control over those assets and the assets ceased to belong to assessee. The sundry debtors of the respondent became the sundry debtors of the Nigerian company. Other assets like cash and bank balance, stockin trade etc. conti....

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....leged bad debt treating loss due to acquisition of the assets by M/s. MECON (Nigeria) Ltd. and with respect to legal issues, the Tribunal considered the issue in para 2 of the impugned order, which are as follows:     "2. We have perused the orders of the lower authorities and found force in the submission of the ld. Counsel for the assessee before us on the issue. There cannot be two ways to decide on the taxability of certain income and if that be so the department should come out with the citations of accounting where such income which could not have certainty in view of diplomatic and other constraints. There is no reason that the contention of the assessee be disproved if the method is in accordance with certain norms s....