Рет қаралды 121
C.I.T. v. Mysore Sugar Co. Ltd., AIR 1967 SC 723 - In this case due to drought, the Company could not work its sugar mills and the Oppigedars could not grow or deliver the sugarcane. The company incurred loss on the advances made. Government set up a committee. As per the recommendation of the committee the acceesee let go the advance as ex-gratia. Accessee claimed the deduction which was disallowed by revenue. The Supreme court held that Clause (xi) of Section 10(2) of the Indian Income Tax Act allows deduction of bad and doubtful business debts. The expenses incurred by the Company were found to be a use of money in the course of the Company's business and not an investment of capital at all. Therefore, the expenses were deductible as a revenue expenditure.