2024 (2) TMI 1342

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.... 1. This is an appeal filed under Section 260A of the Income Tax Act, 1961 (the Act) impugning an order dated 4th September 2002 passed by the Income Tax Appellate Tribunal (ITAT). 2. Respondent (assessee) had filed its return of income on 3rd August 1998 for Assessment Year 1997-1998 declaring total loss of Rs. 57,43,200/-. Assessee's case was taken up for scrutiny assessment and an assessmen....

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....hallenged the order passed by the ITAT on 4th September 2002 in this appeal. The present appeal was admitted on 30th September 2004 and the following substantial question of law was framed : "Whether loans advanced to the Group Company utilised for purchase of properties and shares can be termed as proper debt for the purpose of claim as bad debt u/s. 36(1)(vii) read with Section 36(2) of....

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....ct, which at the relevant time, reads as under : "36(1) ......................... (vii) Subject to provisions of sub-section (2), the amount of any bad debt or part thereof which is written off as irrecoverable in the account of the assessee for the previous year." The above clause, before its amendment w.e.f. 1.4.1989 reads as under : "36(1) - Subject to the....

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....w that it bona fidely believed that the debt had gone bad and the claim could be made, it is to be allowed for the year in which it is written off in the books of accounts. 8. We also find that one of the reasons the Assessing Officer has disallowed the claim of assessee is that assessee is not a money lender and hence, it could not be said that the amount advanced had become bad. We agree with....