NDLI: Pr. Commissioner of Income Tax 6 Vs. Khyati Realtors Pvt. Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act 1961: s.36(1)(vii)
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Income Tax Act, 1961: s.36(1)(vii) – Determination of Income under “Profits and Gains of Business or Profession – Deduction of Bad Debt – In the instant case, respondent-assessee sought deduction of the amount of Rs. 10 crores in determining its income under “Profits and Gains of Business or Profession” upon the premise that said amount was deposited with a builder towards the acquisition of commercial premises two years prior to assessment year but later project did not make any progress and hence the assessee sought refund but the builder did not pay the amount and therefore the same has become bad debt – Claim for deduction of bad debt – Held: The assessee nowhere showed on record that the advance was made to the builder in the ordinary course of business as well as the time by which the constructed unit was to be given to it and area agreed to be purchased – The assessee failed to support the contention that the amount was paid as a loan since it nowhere established the duration of the advance, terms and condition applicable and interest payable – Therefore, assessee’s claim for deduction of ` 10 crore as a bad and doubtful debt could not be allowed. Income Tax Act, 1961: Chapter IV, Part D, ss.28, 36 – Scope – The income of every assessee has to be assessed as per Chapter IV, Part D of the Act – s.28 deals with the chargeability of income to tax under the head ‘Profits and Gains of Business or Profession’ – The other deductions is given u/s.36 of the Act, which opens with the phrase “the deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in s.28” – For the purposes of computing income chargeable to tax, therefore, besides specific deductions, ‘other deductions’ enumerated in different clauses of s.36 can be allowed by the AO – Each of the deductions must relate to the business carried out by the assessee – If the assessee carries on a business and writes off a debt relating to the business as irrecoverable, it would be entitled to a corresponding deduction under clause (vii) of sub-section (1) of s.36 subject to the fulfilment of the conditions set forth in sub-section (2) of s.36 of the IT Act. Income Tax Act, 1961: s.36(1)(vii) – Amendment of 1989 – Pre and Post amendment position – Before the amendment in 1989, even in cases where the assessee had made only a provision in its accounts for bad debts and interest thereon, without the amount actually being debited from the assessee’s Profit and Loss account, the assessee could still claim deduction under s.36(1)(vii) of the Act – With effect from 1 April 1989, with the insertion of the new Explanation under s.36(1)(vii), any bad debt written-off as irrecoverable in the account of the assessee would not include any ‘provision’ for bad and doubtful debt made in the accounts of the assessee – In other words, before this date, even a provision could be treated as a write off, however, after this date, as per the Explanation to s.36(1)(vii), a mere provision for bad debt per se was not entitled to deduction under s.36(1)(vii).
Judge	Hon'ble Mr. Justice S. Ravindra Bhat
Neutral Citation	2022 INSC 864
Petitioner	Pr. Commissioner Of Income Tax 6
Respondent	Khyati Realtors Pvt. Ltd.
SCR	[2022] 7 S.C.R. 37
Judgement Date	2022-08-25
Case Number	5804

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

Pr. Commissioner of Income Tax 6 Vs. Khyati Realtors Pvt. Ltd.

Please Log-in to view this content

M/s. Vijaya Bank Vs. Commissioner of Income Tax and Anr.

Principal Commissioner of Income Tax (central) – 2 Vs. M/s. Mahagun Realtors (p) Ltd.

Pr. Commissioner of Income Tax 6 Vs. Nokia India Pvt. Ltd.

Jt. Commissioner of Income Tax, Valsad, Gujarat Vs. M/s.united Phosphorous Ltd.

Deputy Commissioner of Income Tax, Ahmedabad Vs. M/s. Core Health Care Ltd.

Commissioner of Income-tax, Lucknow Vs. Bazpur Co-operative Sugar Factory Ltd.

Commissioner of Income Tax Vs. Kerela State Industrial Development

R & B Falcon (a) Pvt. Ltd. Vs. Commissioner of Income Tax

Deputy Commissioner of Income Tax (central) Circle 1(2) Vs. M/s. M. R. Shah Logistics Pvt. Ltd.

Pr. Commissioner of Income Tax 6 Vs. Khyati Realtors Pvt. Ltd.

Pr. Commissioner of Income Tax 6 Vs. Khyati Realtors Pvt. Ltd.

Please Log-in to view this content

Similar Documents

M/s. Vijaya Bank Vs. Commissioner of Income Tax and Anr.

Principal Commissioner of Income Tax (central) – 2 Vs. M/s. Mahagun Realtors (p) Ltd.

Pr. Commissioner of Income Tax 6 Vs. Nokia India Pvt. Ltd.

Jt. Commissioner of Income Tax, Valsad, Gujarat Vs. M/s.united Phosphorous Ltd.

Deputy Commissioner of Income Tax, Ahmedabad Vs. M/s. Core Health Care Ltd.

Commissioner of Income-tax, Lucknow Vs. Bazpur Co-operative Sugar Factory Ltd.

Commissioner of Income Tax Vs. Kerela State Industrial Development

R & B Falcon (a) Pvt. Ltd. Vs. Commissioner of Income Tax

Deputy Commissioner of Income Tax (central) Circle 1(2) Vs. M/s. M. R. Shah Logistics Pvt. Ltd.

Pr. Commissioner of Income Tax 6 Vs. Khyati Realtors Pvt. Ltd.