Aarav Fragrances And Flavors Private Limited vs. ACIT, Circle-1, Thane

Parties Involved

Facts Summary

The assessee, Aarav Fragrances And Flavors Private Limited, filed its return of income for the Assessment Year 2016-17 on 29/11/2016, declaring a total income of Rs. 112,93,450/-. The case was selected for complete scrutiny. The Assessing Officer (AO) passed an assessment order making several disallowances, including disallowance of bad debts of Rs. 15,79,234/-, disallowance of long-term capital loss of Rs. 11,52,48,813/-, and 20% disallowance of various expenses amounting to Rs. 3,95,526/-. The assessee appealed against the order of the Commissioner of Income Tax (Appeals), which upheld the disallowances. The assessee further filed an application for admission of additional grounds before the Tribunal.…

Legal Issues

• 1. Disallowance of bad debts of Rs. 15,79,234/- under section 36(2) of the Act.
• 2. Adhoc disallowance of 20% of expenses amounting to Rs. 3,95,526/-.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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