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Facts
The appellant, Ocean Diving Centre Limited, filed an appeal against the ACIT's order concerning the Assessment Year 2021-22. The appeal raised four primary issues: adjustment for Corporate Guarantee, adjustment for interest on a loan, payment of disputed customs duty, and disallowance of sundry balances written off.
Held
The Tribunal decided to remit the issue of corporate guarantee to the DRP for adjudication due to pending rectification petitions. The charging of interest on a loan to an Associated Enterprise was upheld, citing the loss of opportunity to earn interest and established legal principles. The issue of disputed customs duty was remitted to the AO/TPO for verification of the purpose of payment. The disallowance of written-off amounts as bad debt was also remitted to the TPO for fresh adjudication.
Key Issues
The appeal involved disputes over corporate guarantee commission, interest on a loan to an AE, deductibility of disputed customs duty, and allowability of written-off amounts as bad debts.
Sections Cited
143(3), 144C(13), 43B, 10B, X
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Income Tax Appellate Tribunal, ‘J’ BENCH, MUMBAI
per Income Tax Law, i.e. if it is not for the purposes prohibited by law, then the same may be allowed after verification.
The last issue raised by appellant company and to be adjudicated relates to certain amounts which were written off in the books are to be allowed as expenditure. The DRP has confirmed the disallowance of Rs.8,77,970/- as the appellant could not prove how this amount is to be treated as bad debt. Before the ITAT also, the Ld.AR of appellant could not clarify the issue and hence requested the Bench to remit the issue back to TPO for verification. Accordingly, the Bench remits the issue to TPO for fresh adjudication.
In the result, appeal of the appellant is partly allowed for statistical purposes as above.
Order pronounced in the open court on 5th February, 2026.
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Sd/- Sd/- (पवन िसंह) (ओ�कारे�र िचदरा) (PAWAN SINGH) (OMKARESHWAR CHIDARA) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER Visakhapatnam, Dated 05.02.2026. L.Rama/SPS
आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to:- 1. िनधा�रती/The : Assessee 2. राज�/ : The Revenue 3. The Principal Commissioner of Income Tax 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR,ITAT. 5. The Commissioner of Income Tax 6. गाड�फ़ाईल / Guard file
आदेशानुसार / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam