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2017 (10) TMI 1568 - AT - Income TaxDisallowing of bad debts - deduction under the head bad debts written off in the books of accounts - HELD THAT:- In the case of the assessee, the explanation offered cannot be simply overlooked without looking into each and every event occurred between both the parties. The argument of the Ld.AR that, when the assessee had suffered loss due to irrecoverable of advances made during the course of its business, the same has to be allowed as deduction U/s.28 of the Act has merits. Loss arising from business has also to be set off from the profits of the business. Further the ratio laid down in the case TRF Limited vs. CIT [2010 (2) TMI 211 - SUPREME COURT] is applicable in the case of the assessee wherein has held that “After 1st April 1989, it is not necessary to establish that the debt in fact has become irrecoverable” Thus the loss written off by the assessee is genuine and has to be set off from the profit earned by it. Further the case cited by the Revenue has no relevance considering the facts and circumstance of the assessee’s case before us. Hence, we hereby direct the Ld.AO to grant deduction being the loss suffered by the assessee as irrecoverable advances with respect to real estate business and thereby delete the addition. Disallowance u/s 40(a)(ia) - Disallowance of interest paid - Whether the provisions of Section 40(a)(ia) shall be attracted when the amount is not 'payable' to a contractor or sub-contractor but has been actually paid? - HELD THAT:- As relying on M/S. PALAM GAS SERVICE VERSUS COMMISSIONER OF INCOME TAX [2017 (5) TMI 242 - SUPREME COURT] if the assessee in not deemed to be an assessee in default under the first proviso to sub-section(1) of section 201, then, Section 40(a)(ia) of the Act will not be attracted w.e.f. 1-4-2013 i.e., from the assessment year 2012-13. Hence we hereby remit the matter to the file of the Ld.AO to examine the issue with respect to the applicability of the provisions of Section 40(a)(ia) of the Act in totality and thereafter decide this issue afresh in accordance with law and merits. Appeal of the assessee is partly allowed for statistical purpose.
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