A. V. THOMAS & CO., LTD., ALLEPPEY vs THE COMMISSIONER OF INCOME-TAX,(BANGALORE) KERALA

The Supreme Court held that the amount advanced by the assessee company for the purchase of shares was of a capital nature and thus not allowable as an expenditure under Section 10(2)(xv) of the Indian Income-tax Act, 1922. The Court further ruled that the amount could not be classified as a bad debt under Section 10(2)(xi) since it was not an outstanding debt that would have increased profits, but rather an advance for a purchase that did not materialize. The appeal was dismissed, affirming the High Court's decision.