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Industrial Cables (I) Ltd. vs Acit on 29 July, 2005 cites

Tea Estate India (P) Ltd vs Commissioner Of Income-Tax on 26 April, 1976

3. The assessee is manufacturer of power cables claimed amount of Rs. 2,37,43,429/- as bad debts. During assessment proceedings the assessee was asked to justify and to produce the evidence to prove that the debts have indeed gone bad and irrecoverable. The assessee in its reply claimed, "that the only requirement of law was that bad debts were allowable in the year in which the amount was written off. The amount has been written -of the current year and the bad debts were duly approved by the Board of the Company." The assessee further claimed that the bad debts pertains to government parties like HSEB, GEB, HPSEB and various other -Electricity Bards and Power Plants. The Assessing Officer placed reliance upon the decision in the case of Associated Banking corporation of India Ltd v. CIT [1965] 56 ITR 1 (SC) and disallowed the claim of debts and made the addition of Rs. 2,37,43,429/- to the total income of the assessee.
Supreme Court of India Cites 20 - Cited by 68 - H R Khanna - Full Document

Travancore Tea Estates Co. Ltd. vs Commissioner Of Income Tax, Cochin on 17 December, 1997

It means something, which is related to the business or results from it. Undisputedly the bad debt/irrecoverable amounts are towards government agencies/boards, so there is as ray of hope for the recovery. The debt may become bad when it is proved to be irrecoverable on account of the fact that the debtor is in a bad financial position or that it has become irrecoverable. So long there is a ray of hope of recovery of the debt, however, dim it may be, and so long as the debt is in the process of realization it cannot be said that it has become irrecoverable. Some views were expressed by the Hon'ble High Court of Kerala in the case of Travancore Tea Estates v. CIT .
Supreme Court of India Cites 0 - Cited by 48 - Full Document

Biyani Chambal Ka Mahabhandar vs Income Tax Officer on 13 September, 2004

14. The next ground raised by the revenue pertains to deleting the addition of Rs. 28,57,897/- on account of interest free loans advanced by the assessee to its subsidiary companies. The revenue has relied upon the decision in ITA N.373/Chandi/03 in the case of Biyani Chambal Ka Mahabhandar v. ITO wherein it was concluded that the assessee is paying interest on borrowed capital and also paying interest on capital of the partners, but having given interest free loan to a constituent of HUF partner pro-rata was rightly disallowed by the Assessing Officer. The issue has been dealt with at page 4, para 5 of the assessment order. The assessee claimed a deduction of Rs. 78706736,000/-- in the return on account of interest paid/payable on loans. The Assessing Officer found that the interest bearing loans were diverted to subsidiary company wherein the directors of the assessee company were having substantial interest. The total amount of loan outstanding as on 31.3.98 to such company was Rs. 1,58,77,208/-. It was pointed out, that on this issue the Hon'ble Tribunal in the case of assessee for the assessment year 92-93 deleted the impugned addition. There is a specific finding by the learned first appellate authority that for the assessment year 97-98 such addition was deleted by following the decision of the Tribunal in the case of assessee itself for the assessment year 91-92 wherein it was held that merely because the assessee is having overdraft with the bank and having advanced certain loans to subsidiary company, it is not proving the nexus between the interest bearing funds and interest free loans given to the subsidiary company specially when the assessee has surplus sufficient founds and cover to loans given to sister concerns, out of which advances to sister concerns can easily be made.
Income Tax Appellate Tribunal - Chandigarh Cites 8 - Cited by 1 - Full Document
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