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May 2025

Section 36(1)(vii): Advances written off – Allowable: Section 10B – Deduction – Site Transfer Income : Tribunal last fact-finding authority ought to have given independent finding while reversing decision of lower authorities :

By Ajay R. Singh, Advocate
Reading Time 7 mins

Pr. Commissioner of Income Tax-11 vs. Watson Pharma Pvt. Ltd.,

[ITXA No. 1770 OF 2017, Dated: 26th March, 2025, (Bom) (HC)]

AY 2010-11.

Section 36(1)(vii): Advances written off – Allowable:

Section 10B – Deduction - Site Transfer Income : Tribunal last fact-finding authority ought to have given independent finding while reversing decision of lower authorities :

The Assessee is a wholly owned subsidiary of M/s. Watson Lab., USA and is engaged in the business of manufacturing and R & D facilities in India and also renders contract manufacturing services to its associate enterprises.

During the year under consideration, the assessee wrote-off various advances which were given in earlier years in the course of its business and same could not be recovered. The claim was made under Section 36(1)(vii) of the Act, and in the alternative under Section 28 of the Act. The assessee vide letter dated 4th March, 2014 addressed to the Assessing Officer (AO) gave the details of such write off by way of enclosures. These details pertain to more than 50 parties on account of various transactions which were stated in the remarks column e.g.,

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