Advances Write off allowed

In a nuanced ruling, the Tribunal drew a clear distinction between bad debts and business losses. It held that advances or deposits written off, though failing the strict conditions of Section 36, may still be allowable under Section 28/37 if they arise from business operations and are incurred wholly and exclusively for business purposes. 

Applying this principle, the Tribunal allowed write-off of a lease-related deposit and forfeited earnest money, recognizing them as business losses. However, it disallowed a loan write-off treated as a personal or non-business advance. 

The ruling provides a structured framework for evaluating deductibility of advances based on commercial nexus rather than nomenclature.