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2017 (9) TMI 798 - ITAT MUMBAILoss on account of “Securities written off” disallowed - claim of bad debts - Held that:- The undisputed facts of the case are that the writing off of this amount was not in challenge but the year in which the amount was to be written off and the year in which it has to be allowed by the authorities. We find merit in the contention of the ld.AR that the writing off of the said amount in neither of the assessment year i.e. 2010-11 or 2011-12 is tax neutral as is clear from the computation of total income filed as the in that both the years the taxable income of the assessee was NIL. In the first year, the assessee sustained loss of ₹ 46,80,427/-. In the next year income after adjustment of the brought forward losses to the tune of ₹ 77,17,152/- is turned out to be NIL. In the case of Vishnu Industrial Gases Pvt Ltd [2008 (5) TMI 636 - DELHI HIGH COURT] held that where the rate of tax remained same in both the assessment years then the issue of whether the tax is leviable in one year or other year is immaterial. In the present case, also in both the assessment year the income of the assessee is not assessable to tax at all. We also find that the assessee has decided to write off when it finds that the further investment in the said securities would be loss making propositions considering the adverse market conditions. Moreover, it is the assessee who can take decision to write off of the amount which became bad in particular year and the revenue cannot dictate the terms of writing off the bad debts or how to run the business in the ordinary course of business. On this count also the deciding of writing off the bad debts deserved to be allowed. We, therefore, set aside the order of the FAA and direct the AO to delete the disallowance. - Decided in favour of assessee.
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