Held that the giving of advances to employees and vendors was essential, and wholly and exclusively linked to the business of the assessee. The loss, if any, was an incidental business loss. The non-recoverable advances given to vendors were also allowable as a business loss. The Assessing Officer was directed to examine the assessee’s claim of deduction under section 37(1) read with section 28. Matter remanded. (AY. 2014-15)
Xchanging Solutions Ltd. v. Dy. CIT (2022)96 ITR 544 (Bang)(Trib)
S. 28(i) : Business loss-Advances given to employees for meeting expenses-Amounts irrecoverable-Allowable as business loss-Matter remanded to the Assessing Officer for fresh examination. [S. 37(1)]