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2012 (12) TMI 685 - AT - Income TaxBad debt claim - disallowance on no description as to why the debts had gone bad - Held that:- As decided in T.R.F. LTD. Versus CIT [2010 (2) TMI 211 - SUPREME COURT] after the amendment of section 36(1)(vii) w.e.f. 01.04.1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact has become irrecoverable. It is enough of the bad debt is written off as irrecoverable in the accounts of the assessee - thus bad debts claim of the assessee as written off as bad in its books of account as irrecoverable is upheld - in favour of assessee. Leave Encashment – disallowance as not paid before the due date for filing of the return - Held that:- Following the decision in case of M/s Bharat Earth Movers Ltd. vs CIT [2000 (8) TMI 4 - SUPREME COURT] provision made for leave encashment cannot be taken as a contingent liability and hence it is an ascertained liability. However, the legislature by way of amendment restricts such deduction in the case of leave encashment unless it is actually paid in that particular financial year - order of the CIT(A) is set aside and restore the issue to the file of the AO to verify whether the amount has been paid before filing of the return or not - in favour of assessee for statistical purposes. LIC Group Gratuity Scheme payments – disallowance as payments not made to an irrecoverable trust for the exclusive benefit of the employees - Held that:- Following the decision of court in case of [Metal Box Company of India Ltd. Vs. Their Workmen 1968 (8) TMI 53 - SUPREME COURT an amount paid towards an unapproved gratuity fund can be deducted u/s 37 though not u/s 36(1)(v) - order of CIT(A) set aside and claim of deduction being the amount paid to the LIC towards LIC Group Gratuity Scheme is allowed - in favour of assessee. Remission of loan – Held that:- Provisions of sec. 41(1) do not apply to the facts of the case - CIT(A) ought to have held that the said sum does not represent the income of the appellant - restore this issue to the file of the CIT(A) for adjudication de-novo - appeal of the assessee allowed for statistical purposes.
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