“Section 50(2)(vii)”
The decision most relied on for Section 50(2)(vii) is CIT v. Assam Petroleum Industries Pvt. Ltd. (262 ITR 587), cited in 39 judgments on BharatTax.
Leading authorities on Section 50(2)(vii)
The fiction created by Section 50(1) and (2) of the Income Tax Act, 1961, applies only to the computation of capital gains under Sections 48 and 49, and not to other provisions. Section 54E is available for exemption irrespective of whether the asset is depreciable or not.
Managerial services require both planning and execution; mere execution of directions from another party does not qualify as managerial services.
The conditions for claiming a bad debt deduction under Section 36(1)(vii) read with Section 36(2) are not fulfilled if the assessee fails to provide details of the parties associated with the debts or evidence that these amounts were offered to tax in earlier years. An alternate claim for loss under Section 28 is denied without evidence substantiating the loss in the relevant assessment year.
An assessee can claim an outstanding balance as a business loss under Section 28 if it arises from regular business transactions, even if conditions for bad debt deduction under Section 36(1)(vii) are not met, provided sufficient evidence is produced.
