ITAT Delhi allows lease equalization and business loss write-offs

Birlasoft Ltd. Vs ACIT (ITAT Delhi) Assessment  of a software development company was completed u/s 143(3)   making two key disallowances:-Lease Equalization Reserve (LER) &  Bad Debts Written Off. On appeal CIT(A) upheld both disallowances. Before the Tribunal, assessee raised two main issues-whether LER (created under Accounting Standard-19) is an allowable business expenditure & whether write-offs of certain advances & deposits can be treated as business loss under Section 37(1). ARGUMENTS OF THE ASSESSEE Lease Equalization Reserve (LER) Lease rentals under operating leases ...