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2015 (5) TMI 80 - HC - Income TaxDisallowance u/s 36(i)(vii) - assessee has not fulfilled the conditions as per section 36(2)with respect of claim of Bad Debt - ITAT allowing the assessee's claim for Bad Debts - Held that:- There was no occasion for the AO to disallow the write off on the ground that no attempts have been made to recover the same. The assessee acquired a proprietory concern M/s.Sharda International and the assets in the form of advances of the balance sheet of two entities were part of the acquisition. These advances were bad debts and were written off under the provisions of Section 36(1)(vii) as amended and effective from 1st April, 1989. Prior to 1st April, 1989 Section 36(1)(vii) provided that for an amount of debt or part thereof to be written off it would have to be established that it became a bad debt in the previous year. Therefore, the fact that the said debt had become irrecoverable should have been established. However, after 1st April, 1989 the amended section provided that the amount of bad debt or part thereof which is written off as irrecoverable could be claimed as deduction. Accordingly no fault can be found with the order of the Tribunal. - Decided in favour of assessee.
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