Case Law Analysis
|Income Tax Appellate Tribunal
Section 37 IT Act | Forfeited Earnest Money Deposit for Business Tender Allowable as Revenue Expenditure : ITAT Delhi
ITAT Delhi rules that forfeiture of earnest money deposit (EMD) in a joint gas tender, incurred to secure fuel for hotel operations, qualifies as a deductible business expenditure under Section 37 of the Income Tax Act. The ruling clarifies that such losses are revenue in nature, directly linked to business operations, and not capital expenditure.