Advance money given as retention to the companies for contract. Neither the interest nor principle amount settled against the same by these companies. Said advances were in nature of irrevocable and having nexus with the business hence allowable as business loss . (AY. 2006 – 2007 to 2008-2009)
Dy.CIT v. Mcnally Bharat Engineering Co. Ltd. (2018) 191 TTJ 822 (Kol.)(Trib.)
S.28(i) : Business loss – Retention money – Advances to the companies which are in nature of irrevocable which are written off in the books is allowable as business loss.