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2021 (12) TMI 643 - AT - Income TaxDisallowance on account of bad debt written off - addition made by AO as assessee has not made sufficient efforts to recover the outstanding due - CIT-A deleted the addition - HELD THAT:- The aforesaid reasoning of the AO is unsustainable - assessee was a sub-contractor under M/s Naftogaz India Pvt. Ltd., who was awarded a contract by ONGC. The assessee was assigned the specific work of physical survey, positioning support for diving etc. Subsequently, ONGC cancelled the contract with M/s Naftogaz India Pvt. Ltd. As a result of which the amount due to be received by the assessee from M/s Naftogaz India Pvt. Ltd. could not be recovered - Rreasoning of the AO that the assessee has not made sufficient effort to recover the outstanding due is contrary to the materials on record, considering the fact that the assessee has issued legal notice for recovery of the dues. In any case of the matter, after the amendment to section 36(1)(vii) w.e.f. 01.04.1989, it is not necessary for the assessee to prove that the amount has become irrecoverable despite best efforts. The only requirement is, the amount must have been written off having become irrecoverable. This is the view expressed by the Hon'ble Supreme Court in case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT] - Decided against revenue.
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