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2015 (6) TMI 934 - AT - Income TaxDisallowance of bad debts - CIT(A) deleted the disallowance - Held that:- On the one hand, the AO is taxing the income shown by the assessee by way of liabilities no longer required written off of ₹ 36,91,095/-, but, on the other hand, the AO was not allowing deduction for bad debts of ₹ 34,64,718/- claimed by the assessee. Further, the DR has not controverted the findings of the CIT(A) that bad debt of ₹ 34,64,718/- claimed by the assessee was shown as sales by the assessee in the earlier years, which was accepted by the AO as genuine. Further, the Hon’ble Supreme Court in the case of T.R.F.Ltd. (2010 (2) TMI 211 - SUPREME COURT ) has held that it was not necessary for the assessee to show after 1.4.1989 as per amended section 36(1)(vii) of the Act that the debts have in fact become irrecoverable, but only writing off of the same in the accounts by the assessee was enough. It is not in dispute that the assessee has written off debts of ₹ 34,64,718/- as bad in its books of accounts. It has not been disputed that the debt which has been written off by the assessee arose out of sales made on credit in earlier years and the same was shown as receivable by the assessee in last several years. The same balance was brought forwarded from earlier several years and no recovery therein was made in last few years. The write off of the debts in the books of accounts by the assessee is prima facie evidence of its becoming bad. The Revenue could not bring any material on record to show that the debt had not become bad or any recovery was made by the assessee. Thus no good reason to interfere with the order of the CIT(A) - Decided against revenue.
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