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2013 (4) TMI 177 - ITAT MUMBAIBad debts written off disallowed - Appellant-company is engaged in the business of broking services in commodities and investment - Held that:- AO has not made any enquiry as what happened in the subsequent years about the debtors. It appears that the AO of the debtors were also not contacted in this regard. Thus when debts were held to be bad in the same year, further enquiries were to be carried out by AO to reach at a logical conclusion about allowability/dis-allowability of that particular debt. Relying on the case laws of TRF Ltd. (2010 (2) TMI 211 - SUPREME COURT) was not proper on the part of the AO though FAA has held that provisions of Section 36(2) were not fulfilled, but he has not elaborated as how there was violation of the said provisions. The requirements of written-off the bad debts as decided in the case of TRF Ltd. (supra) & Shreyas S. Morakhiya [2012 (3) TMI 103 - BOMBAY HIGH COURT] clearly expect the AO to take a view based on facts of the particular case. As in the present case the assessee is a broker of commodity exchange and assessment year under consideration was the period when commodity market was in its infancy stage. AO has admitted that income earned by the assessee from these two brokers amounting to Rs. 1.4 Lakhs had been offered for taxation by the assessee-company. After accepting the income of the assessee from the said transaction, he should have accepted the irrecoverability of the loans also. Respectfully following the above decision the appeal decided in favour of assessee.
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