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2019 (12) TMI 907 - AT - Income TaxDisallowance in respect of bad debts - bad debts comprising of settlement of claims and appended a note no. 31 to financial statements to that effect and not acknowledged by Reliance entities as debts - AO rejected the claim of the assessee by holding that the amounts written off were sham transactions and was a methodology to reduce tax liability in the hands of the assessee - CIT(A) partly allowed the appeal of the assessee - HELD THAT:- Revenue has not disputed the dealings by the assessee company with Reliance entities which have been offered by the assessee to tax. We are also not in agreement with the findings of the CIT(A) that the said transactions were sham transactions especially when the revenue offered by the assessee has accepted by the Revenue authorities. Moreover, the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of T.R.F. Ltd. [2010 (2) TMI 211 - SUPREME COURT] wherein held that once the debts are written off as irrecoverable, that is sufficient and assessee is not required to prove that the debt has actually become bad during the year. Thus order of the learned CIT(A) cannot be sustained as the assessee has written off the bad debts as same have been offered to tax by the assessee in the earlier year and accepted by the Revenue - Decided in favour of assessee.
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