Non-repayment of loan advanced to subsidiary company is allowable business loss

Banpal Oilchem Pvt. Ltd. Vs ACIT (ITAT Ahmedabad) ITAT Ahmedabad held that loss on account of non-repayment of loan advanced to subsidiary company for the purpose of incorporation of business is an allowable business loss. Facts- The assessee company is engaged in the business of non-edible castor oil. The assessee set up wholly owned subsidiary named Banpal Agro-Tech Pvt. Ltd. The assessee advanced a sum of Rs. 2,88,52,100/- to the subsidiary company incorporated for the above purpose. However, the business of the subsidiary company could not take off and it was unable to repay the aforesaid ...