Section 36(2)(i)- Loan- Bad Debts allowable if assessee offered interest income to tax in earlier years

Brief of the case

Assesse received interest on inter-coporate deposit which was offered to tax in earlier years. Subsequently, assesse made certain provision for bad debts. A settlement arrived at in terms of which assesse received a part of loan amount. Assesse claim for balance, as bad debts was rejected on ground that said amount was not offered for tax. Revenue challenged assesse claim on ground that since assessee cannot be said to be engaged in activity of money lending or business of banking, provision of bad debts could not

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