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2018 (4) TMI 497 - AT - Income TaxLoss claimed on termination of a Hire Purchase Contract with a one Zen Global Finance Ltd., after allowing as bad debts - Held that:- In the case of DIA v. Oman International Bank (2009 (2) TMI 54 - BOMBAY HIGH COURT) it has been held that after amendment to section 36(1)(vii), it is neither obligatory nor is there any burden on the assessee to prove that debt written off by him is indeed a bad debt as long as it is bonafide and is based on commercial wisdom or expediency. In the case of CIT v. Star Chemicals (Bombay) Limited (2008 (2) TMI 399 - BOMBAY HIGH COURT), it has been held that if assessee has written off debt as bad debt, that would satisfy purpose of section 36(1)(vii). We find that the assessee after receiving payment of ₹ 25 lacs, has rightly written off the balance outstanding amount of ₹ 2,21,92,554/- in the books of account in December, 2001 as loss on termination of contract. This view is supported by the ratio laid down in the decisions mentioned hereinbefore. Penalty u/s 271(1)(c) - Held that:- Order of the Ld. CIT(A) confirming disallowance of depreciation of ₹ 34,65,465/- on leased assets has been set aside and the matter has been restored to the file of the AO for a de novo order. It has been held in K. C. Builders v. ACIT (2004 (1) TMI 7 - SUPREME Court) that where the additions made in the assessment order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and, therefore, in such a case no such penalty can survive and the same is liable to be cancelled. Similar is the position in case the order of the CIT(A) is set aside and the matter is restored to the file of the AO.
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