Law:

Section:

JUDGMENT Dr. Manjula Chellur, CJ. - This matter is taken up for final disposal by consent of both appellant and the Revenue. 2. The following substantial questions of law arise for consideration:- "(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in confirming the disallowance of claim for Bad Debts amounting to Rs.30 lakhs? (2) Whether, on the facts and circumstances of the case, there is any material or evidence on record to justify the decision of the Income Tax Tribunal that the inter-corporate deposit made by the Appellant is not money lent in the normal course of business?" 3. The entire controversy revolves around appellant-assessee's claim of bad debt of advance of a sum of Rs. 30 lakhs to another Public Company, by name M/s. Peermade Tea Company Limited during financial year 1996-97. It is not in dispute that the accrued interest of Rs. 23,76,274/- (Rupees twenty three lakhs seventy six thousand two hundred seventy four only) was declared as outstanding along with principal amount in the returns of appellant/assessee. According to appellant/assessee this amount of Rs. 30 lakhs pertains to transaction of loan in the normal course of money lending, which is one of the objects of the assessee-company as per Articles of Memorandum of Association. It is also not in dispute, appellant/assessee subjecting this accrued interest in previous assessment years while computing the income of the assessee. 4. The assessing officer for assessment year 2007-08 opines that appellant/assessee is not engaging in the business of banking or money lending as it is mainly dealing in shares and hence the loan advanced cannot be held as having lent in the ordinary course of business of banking or money lending. This opinion of the assessing officer further substantiated saying major portion of income returned by the assessee is from sale of shares as well as dividend. However, he also refers to nature of Rs. 30 lakhs advanced by appellant/assessee to another public limited company as an inter-corporate loan. Ultimately, the assessee's claim of principal amount of Rs. 30 lakhs as bad debt is not allowed, so also the interest…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492