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2013 (3) TMI 438 - HC - Income TaxDisallowance of bad debts - Postpone of claim of bad debts which had already become bad before amalgamation - ITAT deleted the disallowance - Held that:- Where the amalgamating company carried certain doubtful debts which were, till date of amalgamation, not written off as bad debts and only after amalgamation, they were written off as bad debts in the succeeding year, the transferee company i.e. assessee company could write off such doubtful debts as bad debts. Once amalgamation took place, there could hardly be a matter of dispute that such debts being the liability of the company passed on to the transferee company and after the amendment, it needed to be allowed in the year it was written off in the books. As held in T.R.F. Ltd. Vs/. Commissioner of Income-tax reported in [2010 (2) TMI 211 - SUPREME COURT] after the amendment of section 36(1)(vii) in order to obtain a deduction of bad debts, it is not necessary for the assessee to establish that the debt, in fact, had become irrecoverable; it is enough if the bad debts are written off as irrecoverable in the accounts of the assessee. Also in the case of CIT V.T. Veebadhrarao & K. Koteshwerarao & Co. & Co. [1974 (1) TMI 23 - ANDHRA PRADESH HIGH COURT] it was opined that once firm/company is taken over by the successor-firm, the successor-firm can claim deduction of the predecessor firm under Section 36(2) of the Act. AO wrongly placed reliance on Section 72A which pertains to carry forward and set off of the accumulated loss and unabsorbed depreciation allowance in case of amalgamation of company but in the present case,this was not a case of any carry forward of loss or depreciation of the assessee company, but claiming of bad debts with respect to certain doubtful debts of the amalgamating company were written off as bad debts after amalgamation - in favour of assessee. Late payment of employees' provident fund contributions u/s. 36 (1)(va)- CIT(A) deleting the addition as confirmed by ITAT - Held that:- Tribunal has confirmed the view of CIT(A) under which he had directed the AO to allow the benefit, if it was paid within five days of grace period. Amount involved is also not very large, thus no reason to interfere with this question - in favour of assessee.
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