Sec. 37

The assessee is a company engaged in the business of manufacturing and trading of machine tools. The  A.O. had made an addition of Rs. 14.5 lakhs on account of disallowance of investments and irrecoverable loans and advances written off on the ground that the said sums are given to subsidiary of the assessee company as capital investment and loan and hence are capital in nature and neither the said amount were taken as part of income in any of the earlier years without appreciating the submissions given by the assessee that amount paid by the assessee co clearly in the…

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