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2022 (3) TMI 1188 - AT - Income TaxBad debts - Provision for doubtful debts and doubtful advances - CIT-A disallowed claim as assessee has not written off the amount of bad debts in the ledger account of individual parties and the same cannot be allowed as a deduction merely on the basis of the provision for doubtful debts and doubtful advances - HELD THAT:- There is no dispute to the fact that the assessee has claimed deduction under the head provision for doubtful debts and doubtful advances by debiting the profit and loss account and simultaneously making adjustments in the sundry debtors account and advances account as reflected in the balance sheet as on 31/03/2010 Whether the assessee can claim a deduction for the provision of doubtful debts without giving adjustment in the individual ledger account of the sundry debtors? - This issue has been decided in favour of the assessee by this Tribunal in the case of Vidras India Ceramics (Pvt.) Ltd.[2019 (5) TMI 1884 - ITAT AHMEDABAD] wherein granted relief to the assessee for the provision made with respect to doubtful debts. Respectfully following the same we hold that assessee is eligible for deduction on account of provision for doubtful debts in the given facts and circumstances. It is for this reason that the assessee in the present case has written off the provision of doubtful debts in the profits and loss account and also has given effect in the balance sheet of the assessee. Thus to our understanding the principle laid down by the Hon’ble S.C in the case Vijay Bank [2010 (4) TMI 46 - SUPREME COURT] cannot be denied for its application merely on the reasoning that the word provision for doubtful debts has been used by the assessee in its Financial Statements. Assessee has not written off the provision for doubtful debts in the individual ledger account of the sundry debtors for the reason that it will lose it right in the Civil proceedings for recovery of its dues from the sundry debtors. This argument of the Ld. A.R was not controverted by the Ld. DR for the assessee at the time of hearing. Accordingly, we hold that the assessee is entitled to the deduction for the provision of doubtful debts in the given facts and circumstances. - Decided in favour of assessee.
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