B. D. Bharucha v. C.I.T. (1967)| Taxation Law

B.D. Bharucha v. C.I.T., AIR 1967 SC 1505 - the issue in this case was whether the appellant entitled to claim the amount of Rs 80,759 as a bad debt under Section 10(2)(xi) of the Income Tax Act, and was the loss suffered by the appellant a revenue loss rather than a loss of capital? The Supreme Court held that the losses incurred in the running of a business cannot be considered capital losses. The debt had become irrecoverable in the relevant accounting year, and the amount had been written off as irrecoverable in the appellant's books. Therefore, the appellant is entitled to claim the amount of Rs 80,759 as a bad debt under Section 10(2)(xi) of the Income Tax Act, and the loss suffered by the appellant was not a loss of capital but a revenue loss.