Irrecoverable loss incurred due to bad weather and technical snags would be considered as Revenue Loss

Last updated: 15 October 2021

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The Income Tax Appellate Tribunal (ITAT) in Pune has ruled that losses incurred due to adverse weather conditions and technical problems in a related business venture can be treated as a revenue loss for tax deduction purposes. The case involved Roj Enterprises Pvt. Ltd., which invested in another company to secure its own supply chain. Despite the initial disallowance by the Income Tax Officer, the ITAT found that the losses were indeed incurred for the purpose of the assessee's business and therefore should be allowed as a deduction.

Court :
ITAT Pune

Brief :
The Hon'ble Income Tax Appellate Tribunal, Pune ("the ITAT Pune") in the case of Income Tax Officer, Pune v. Roj Enterprises Pvt. Ltd. [ITA No.1292/PUN/2018 decided on October 8, 2021] has held that loss made by the Assessee due to bad weather and technical snags in regard to the money he put in another business in order to further his own business shall be considered as a Revenue Loss under the Income Tax Act, 1961 ("the IT Act").

Citation :
ITA No.1292/PUN/2018 decided on October 8, 2021

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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