TMI Blog2007 (3) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1994-95. The assessee had written off some amount that was due to it as irrecoverable in its books of account. This was in the financial year 1993-94. The Assessing Officer was of the view that these debts were shown as good debts till March 31, 1993, and the assessee was not able to produce any documentary evidence to show that any efforts were made to recover the amount and, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her deductions.- (l) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28-... (vii) subject to the provisions of sub-section (2), the amount of any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year: Provided... Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision generated a considerable amount of litigation on the issue whether the assessee had been able to establish that the debt had become bad. It was to overcome this that the amendment was made resulting in a bad debt "now being straightaway allowed in the year of write off". The interpretation of section 36(1)(vii) of the Act was considered by this court in CIT v. Morgan Securities and Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that by virtue of section 41(4) of the Act, where a deduction has been allowed in respect of a bad debt which is irrecoverable and if the amount or a part thereof is subsequently recovered, then that amount shall be deemed to be profits and gains of business or profession of that relevant previous year. Learned counsel for the Revenue submits that the 1989 amendment incorporates only the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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