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2011 (2) TMI 724 - AT - Income TaxDisallowance - Bad debts on export bills - It is a settled law that when the assessee arrives at a decision that certain debts have become bad and accordingly writes off the same in the books of accounts, section 36(1)(vii)of the Act provides for a deduction - Section 41(1) of the Act provides that if such bad debts written off is recovered during the subsequent assessment years, it shall be treated as income of that year - the assessee is justified to claim deduction u/s. 36(1)(vii) of the Act with respect to the unrealized bills from export turnover. As regards the advances made to corporates for Rs.35 lakhs the assessee has stated that these advances were made pursuant to an agreement for contractual work - No such agreements were produced before us for substantiating such claim - Further, from the assessment order and ld.CIT(A)'s order, no such facts emanate - The findings of the ld. Assessing Officer is that the loan had been given to a sister concern and not for the business of the appellant - This fact has not been disproved before the ld. CIT(A) - Hence, matter be remitted back to the file of ld. CIT(A) in order to grant one more opportunity to the assessee to establish the bonafide of its claim.
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