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2015 (11) TMI 792 - AT - Income TaxEntitlement to deduction on write off of bad debts as irrecoverable amount from Broker and write off of bad advances as irrecoverable amount from Broker - Held that:- The assessee’s efforts to recover the dues from the Broker Shri.Pallav Sheth were in vain and the assessee treated the irrecoverable trade debts and decided to write off the same by crediting the concerned debtor’s account. It is not in dispute that the assessee had duly offered income emanating out of this trade debts and hence the assessee is entitled for deduction u/s 36(1)(vii) read with section 36(2) of the Act.The assessee is entitled to claim deduction towards write off of bad debts and we have no hesitation in directing the Learned AO to grant deduction towards the same. Accordingly, the grounds raised by the assessee in this regard are allowed. - Decided in favour of assessee. Bad advances written off - Held that:- Since the trade advance was made during the course of its business by the assessee, any loss on account of recoverability would automatically fall under the category of trade debt / receivable and hence is allowable as business loss. The assessee is entitled to claim deduction towards write off of bad advances and we have no hesitation in directing the Learned AO to grant deduction towards the same. Accordingly, the grounds raised by the assessee in this regard are allowed. - Decided in favour of assessee.
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