Business Losses, Including Irrecoverable Amounts, Allowable u/s 28 of Income Tax Act: ITAT

The Income Tax Act allows for the deduction of business losses, including irrecoverable amounts, under section 28. The Income Tax Appellate Tribunal (ITAT) has clarified that such losses can be deducted while computing income. This includes irrecoverable amounts that are directly related to business operations. However, the provision does not allow for deductions of personal losses or non-business related expenses. This ruling underscores the importance of distinguishing between business and personal finances in tax filings. The decision also highlights the need for accurate record-keeping and proper classification of losses when filing tax returns. Businesses seeking deductions must ensure compliance with all relevant provisions to avoid potential disputes or issues with tax authorities.