ITAT rejects Bad Debt Claim in respect of Loan to related entity by NBFC

Instronics Limited Vs ITO (ITAT Delhi) In the recent case of Instronics Limited Vs Income Tax Officer (ITO), the Income Tax Appellate Tribunal (ITAT) Delhi addressed a critical issue concerning the treatment of a bad debt claim. Instronics Limited, an NBFC, had claimed a deduction for a loan amounting to ₹53,11,956 that was deemed irrecoverable. The dispute centered around whether this amount could be considered a bad debt under Section 36(1)(vii) of the Income Tax Act, 1961. Background Instronics Limited had extended a loan to UM Power Limited, a sister concern, which later became unrecover...