2000 (3) TMI 34

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....nt previous year ? 3. Whether the finding of the Tribunal that the sum of Rs. 12,507 spent on legal expenses in respect of Habra land was not in connection with the assessee's business and/or was a capital expenditure is based on any material and/or was arrived at by ignoring the relevant materials and/ or is perverse ? 4. Whether the sum of Rs. 12,507 incurred on account of legal expenses for the said Harba land was an allowable deduction ? 5. Whether the finding of the Tribunal that the sum of Rs. 15,40,264 was not an allowable deduction and/or could not be allowed during the previous year is based on any material and/or were arrived at by ignoring the relevant material and/or perverse ? 6. Whether the sum of Rs. 15,40,264 was....

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....the following reasons. It is immaterial whether the bad debt is shown after the close of the accounting year or during the accounting year itself. A Division Bench of this court, in the case of CIT v. United Bank of India [1993] 69 Taxman 505, has held as under : "The accounts of a company are generally made up for every year after a particular date at a later point of time. A company is entitled in law to finalise later as to what was the position of its accounts up to a particular date. A company can similarly finalise its accounts for various purposes at a later date with retrospective effect. In the instant case, in the accounts necessary entries were made for writing off the debt as bad in the light of the facts and circumstances....

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....a subsidiary company of the assessee. In the present case, undoubtedly Shalimar Works Private Limited at the relevant time was a subsidiary of the assessee and this company was wound up because of the orders passed by this court and all the assets of the company were purchased by a wholly owned company of the Government of West Bengal for a sum of Rs. 74,00,000 and the entire amount went to the secured creditor with the result that undoubtedly the assessee had no chance of recovering the amount in question from the aforesaid subsidiary. Under these circumstances, therefore, entirely and obviously since the amount was spent by the assessee and if things would have remained normal the assessee would have been able to recover this amount from ....