Bad debts not allowable if same was not part of income in earlier previous year

The assessing officer’s analysis of what really the transaction was, was based on the correct understanding of the legal position emanating from section 36(1)(vii) of the Act. This corresponds to section 2(10)(xi) of the Income Tax Act, 1922, which was interpreted by the Supreme Court in A.V. Thomas & Co. Ltd. (supra). There, the Court explained that “a debt means something more than a mere advance. It means something which is related to business or results from it. To be claimable as a bad or doubtful debt it must first be

Please become a Premium member. If you are already a Premium member, login here to access the full content.