The Tax Publishers2019 TaxPub(DT) 6286 (SC) : (2019) 266 TAXMAN 0186

INCOME TAX ACT, 1961

Section 261 Section 36(1)(vii)

Where the department filed SLP to appeal against the judgment of karnataka High Court in CIT. v. M/s. Millennia Developers (P) Ltd. [Income Tax Appeal No. 734 of 2009 c/w Income Tax Appeal No. 735 of 2009, dt. 19-11-2018] : 2018 TaxPub(DT) 7797 (Karn-HC), whereby the High Court held that the reason for entering into a family arrangement was with the hope to avoid all future disputes and litigations inter se between members of HUF, therefore, it could not be said that it was a colourable device and the allowance should not be granted to assessee, the circular clearly suggests that all pending appeals should be withdrawn, that merely relying on the first sentence of the circular, that it pertained only with regard to filing of appeals on issue of allowability of bad debts that were written off as irrecoverable could not be accepted, therefore, claim of assessee should be allowed, the Supreme Court dismissed the SLP.

Appeal (Supreme Court) - Special leave petition - Business deduction under section 36(1)(vii) - Allowability of bad debts

Department filed SLP to appeal against the judgment of Karnataka High Court in , whereby the High Court held that the reason for entering into a family arrangement was with the hope to avoid all future disputes and litigations inter se between members of HUF, therefore, it could not be said that it was a colourable device and the allowance should not be granted to assessee, the circular clearly suggests that all pending appeals should be withdrawn, that merely relying on the first sentence of the circular, that it pertained only with regard to filing of appeals on issue of allowability of bad debts that were written off as irrecoverable could not be accepted, therefore, claim of assessee should be allowed.Held: The Supreme Court dismissed the SLP.

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