Advance written off as expense is allowable u/s 37 if related to business. Loss not capital.

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....The Appellate Tribunal considered the disallowance of advance written off as an expense u/s 36(2). The Assessing Officer argued it should be allowable u/s 37 due to a direct nexus with the assessee's business. The issue was whether the amount given up represented a loss of capital or revenue expenditure. Citing CIT vs. Mysore Sugar Co. Ltd, the Tribunal held that as there was no capital investment in the advances, the loss was on the revenue side and deductible. Referring to Appollo Tyres Ltd, it was established that business advances for revenue items are allowable u/s 37. As the amount was given in the course of business, it was allowed to be written off u/s 37. The appeal of the assessee was allowed.....