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2013 (12) TMI 887 - AT - Income TaxBad Debts – Held that:- Sedimentation claims are the normal features of the business carried on by the assessee - The manufacturer has to bear the loss due to sedimentation - The loss on account of sedimentation which the manufacturers have to bear is a debt due by the manufacturer to the assessee - The assessee has therefore recognized the liability which the beer manufacturer has to pay the assessee on account of short supply of beer due to sedimentation loss in its books of account - This liability has all the ingredients of a debt - This debt has been taken into account in computing the income of the assessee in the earlier previous year - Following TRF Ltd. v. CIT [2010 (2) TMI 211 - SUPREME COURT] - It was not necessary for the assessee to prove that the debt in question has become bad and irrecoverable – Decided against Revenue. Bad debts of earlier years – Held that:- The assessee has failed to explain the amounts written off with substantial evidence – The assessee was given opportunity at three appellate stages to substantiate his claim - The assessee has not filed any evidence to substantiate its claim for deduction on account of bad debts – Decided against assessee.
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