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2005 (2) TMI 51 - HC - Income TaxWhether the allowance of claim of Rs. 1,84,375 as bad debt out of the dues shown at Rs. 6,61,723 in the books of account could be justified under section 36(1)(vii) read with section 36(2) - No collusion between the assessee and its debtor has since been established or found by any of the authorities. Therefore, the irrecoverability cannot be questioned and as such the irrecoverable part excluded in the award, having regard to the facts and circumstances of the case, satisfies the ingredients of section 36(2) and is a bad debt allowable for deduction under section 36(1)(vii). - We answer the question in the affirmative, in favour of the assessee and hold that the assessee is entitled to allowance of the claim of Rs. 1,84,375.
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