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2012 (9) TMI 989 - AT - Income TaxSearch Assessment u/s 153A - In the return of income filed by the assessee u/s 153A, the return of income was less than the income declared by the assessee in the original return filed us 139(1) of the Act. - Assessment to be made on the basis of ITR filed u/s 153A or u/s 139(1) - AO observed the excess claim of depreciation in the ITR filed u/s 153A - HELD THAT:- if the A.O. started with the amount of income declared by the assessee u/s 139(1) then there is no excess depreciation claimed by the assessee in this amount of income declared by it in the return of income filed u/s 139(1) - A.O. has to start the computation of income in the assessment completed by him u/s 153A with the income declared by the assessee in the return filed by it u/s 153A and after this, he can make the adjustment on account of excess depreciation claimed by the assessee Decision in the case of M/S. AIRWIDE EXPRESS CARGO VERSUS. ITO, WARD 7 (1) , & VICE VERSA [2011 (10) TMI 631 - ITAT AHMEDABAD], relied upon. Disallowance of bad debts u/s 36(1)(vii) - A.O. has discussed disallowance in respect of the claim of the assessee regarding bad debts u/s 36(1)(vii) but while computing the income on the assessment order, he has made one addition with regard to excess depreciation. - HELD THAT:- Bad debt is allowable in the year of write off of bad debt and the assessee is not required to establish that the debt have actually become bad. Thus, no disallowance of bad debts is called for but this fact has to be ascertained by the A.O. as to whether any addition on this account was in fact made by the A.O. or not and if such addition was made then the same should be deleted. Decision in the case of TRF. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT], relied upon.
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