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2015 (6) TMI 1179 - ITAT CHENNAIAddition of bad debts u/s 36(1)(vii) - proof of debt was incurred in ordinary course of business and corresponding amount has gone into the computation of the assessee’s income - HELD THAT:- We are not in agreement with the findings of the CIT( Appeals) in allowing the claim of the assessee as bad debt. CIT(Appeals) wrongly observed that the assessee is complied with the conditions as stipulated in sec.36(1)(vii) read with sec.36(2) - legal requirement is that the amount of bad debt must have gone into the computation of the assessee’s income. Thus, in the case of a trader, if the sales have been made on credit and corresponding debt becomes irrecoverable, the said debt can be allowed as bad debt, as sales have gone into the computation of the assessee’s income. In the instant case, there is no material to suggest that the debt was incurred in ordinary course of business and corresponding amount has gone into the computation of the assessee’s income and the assessee has not established beyond any doubt that the debt was incurred in normal course of business carried on by the assessee and the method followed by the assessee in writing off debt is not correct. - Decided in favour of revenue
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