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2009 (3) TMI 613 - PUNJAB AND HARYANA HIGH COURTDisallowance - Bad debts - whether the respondent-assessee could claim a deduction on the basis of the bad debt written off was re-examined - Since the assessee had taken over the assets and liabilities of the predecessor firm and since the successor firm continued the business and was even assessed to tax on the income accrued on the debt which was taken over the assessee could write off the debts and claim deduction thereof - It is apparent from the plain reading of the aforesaid provision that an assessee is entitled to a deduction equivalent to the amount of a written off debt, under section 36(1)(vii) of the 1961 Act - There is also no material whatsoever on the record of this case, on the basis whereof an inference can be drawn that the respondent-assessee was treating the aforesaid debt as its income - assessee did not fulfil one of the aforestated mandatory conditions, namely, the debt in question was never reflected in the accounts of the respondent-assessee as its income, the respondent-assessee would not be entitled to a deduction on the basis of its having written off the debt under reference - Decided against the assessee
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