2019 (6) TMI 827

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....nst the deletion of addition of Rs. 72,88,510/- on account of advance to subsidiary written off which was disallowed by the AO on the ground that the same is capital in nature and is not allowable under section 37(1) of the Act. 3. The facts in brief are that during the course of assessment proceedings, the AO after perusing the profit and loss account found that assessee has debited an amount of Rs. 1,12,28,240/- under the head exceptional items being loss on winding up/disposal of subsidiary in the P&L account. Accordingly, assessee was called upon to show cause as to why the said loss of winding up/disposal of subsidiary should not be disallowed which was replied by the assessee vide letter dated 21.03.2016 submitting therein that the....

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....ed to the file of the AO to decide on the same lines. 6. On the other hand, the Ld. A.R. submitted before the Bench that the subsidiary has been would up. The said subsidiary PINC Mauritius and the assessee company advanced USD 1,49,810.92 equivalent to Rs. 72,88,510/- as interest free unsecured advance to meet incorporation expenses, statutory payments and annual maintenance expenses. The Ld. A.R. further submitted that despite best efforts the business of the subsidiary could not get through and it was not able to recoup its losses incurred in the previous year and thereafter the board of direct of the company wound out the company. The Ld. A.R. while opposing the argument of the Ld. D.R. that issue should be restored to the file of th....