2025 (2) TMI 1391

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....f loan advanced by the assessee. 3. The brief facts are that the assessee is a non-banking finance company registered with the RBI. As a part of its lending business assessee has given loan of Rs. 10 Crore to one Shri Ramalinga Raju in F.Y. 2008-09. Since assessee could not recover the said loan it had filed suit before Hon'ble Bombay High Court for the recovery of the said loan. The Hon'ble High Court vide order dated 04/04/2016 in terms of consent terms order and decreed that Shri Ramalinga Raju shall pay a sum of Rs. 5 Crores against outstanding amount of Rs. 10 Crores. Thus, assessee claimed that sum of Rs. 5 Crores as a business loss. It has been stated that in the F.Y. 2008-09, assessee had written off the said loan in the profit a....

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....ot claim it as a deduction in that year. The claim was made in the current year on the basis of a settlement decree by the Hon'ble Bombay High Court. However, the relevant details of the loan transaction-such as its purpose, terms, and impact on revenue-have not been satisfactorily demonstrated by the appellant. The appellant has also not shown that the loan was directly related to its core business operations as an NBFC 6.7 The reliance placed by the appellant on CIT vs. Shreyas S Morakhia (2012) 342 ITR 285 (Bom) and PCIT vs. Hybrid Financial Services Ltd. (2020) 426 ITR 358 (Bom) is distinguishable, as these cases involved bad debts arising from revenue transactions, such as brokerage or trading operations, which di....