AO Disallows ₹4.94 Lakhs Write-Off for Non-Recoverable Dues from Trust Terminated Members: ITAT Allows Citing Non-Refundable Deposit

The Income Tax Appellate Tribunal (ITAT) allowed a Rs. 4.94 lakh write-off for non-recoverable dues from terminated members of a trust. The Assessing Officer had disallowed the write-off, arguing that it was not a deductible expense. However, the ITAT ruled in favor of the trust, stating that the amount was a non-refundable deposit and therefore should be considered a valid expense for write-off. This decision underlines the importance of treating non-recoverable amounts as legitimate deductions, particularly in cases involving membership-related transactions and non-refundable deposits.