2026 (8) TMI 1172

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....he appeals relates to disallowance of claim of bad debts on account of amount not recoverable from Nationals Spot Exchange Limited (NSEL). 3. Briefly the facts relating to this issue are, the assessee is a resident corporate entity stated to be engaged in the following activities: (i) Manufacturing of Zircon Powder, sales, purchase & Jobwork. (ii) Generation of electricity through windmill. (iii) Trading of commodities of NSEL. 4. For the assessment years under dispute, assessee had filed its return of income in regular course. Assessee's case for both the assessment years were selected for scrutiny. 5. In course of assessment proceedings, the Assessing Officer noticed that the assessee had claimed write ....

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....to attach and auction the assets of the defaulters. 8. The first Appellate Authority has given a new dimension to the issue by stating that the transaction is speculative in nature. Fact remains that the assessee has undertaken commodity trading activities on the platform of NSEL for which it has deposited an amount of Rs. 16.19 crores. However, due to default in making payment by certain parties, the assessee had failed to recover certain amount in both the assessment years. The Assessing Officer has not made any adverse comment regarding the fulfilment of conditions of Section 36(1)(vii) of the Act. The only apprehension of the Assessing Officer is that there is chance of recovery of the amount by the assessee in future. In our conside....

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....sessing Officer. 12. Before us, Ld. Counsel appearing for the assessee submitted that the assessee operates three windmill power plants situated at Jaisalmer, Karnataka and Barmer. He submitted, the entire operation, maintenance and management of windmills have been outsourced on a turnkey basis to Suzlon Global Services Ltd. Hence, the assessee claimed deduction u/s 80IA of the Act on the profits on the eligible units after debititng only the direct expenses relatable to those units without apportioning any head office expenses or depreciation on common assets. Thus, he submitted, since no part of head office expense and depreciation on common assets, relate to operation of windmills, allocation of such expenses cannot be made for deter....