2010 (2) TMI 18

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....ith Mr Johnson Bara  CORAM: HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE SIDDHARTH MRIDUL  BADAR DURREZ AHMED, J (ORAL) 1.This appeal filed by the revenue is directed against the order dated 05.05.2006 passed by the Income Tax Appellate Tribunal in ITA 5314/D/ 1996 pertaining to the assessment year 1990-1991.   2. The learned counsel for the revenu....

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.... by way of subsidy not received, which had been shown in the earlier year as a receivable, as per the mercantile system of accounting followed by it.  The assessee claimed this amount as a bad debt under Section 36(1)(vii) of the said Act. 4. The Assessing Officer did not agree with the view taken by the assessee and came to the conclusion that the said amount did not fall within the purvi....

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....as to whether the said amount represented a bad debt or not inasmuch as the Tribunal came to the conclusion that even if it were not to be a bad debt, it would amount to an expenditure under Section 37(1) of the said Act, incurred by the assessee for the purposes of its business and which would be allowable to the assessee. 6. We find that insofar as the question of the said amount representing....

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....mmittee (FICC), the same were sought to be adjusted as subsidy not received.  We agree with the learned counsel for the appellant/ revenue that the assessee had wrongly claimed it as a bad debt under Section 36(1)(vii) of the said Act.  However, we find that the Tribunal has examined the matter in the correct light and allowed the same as an expenditure under Section 37(1) of the said Ac....