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2022 (10) TMI 907 - HC - Income TaxAdditions for recovery of bad debts u/s 41 - As per appellant as recovered the bad debts of the companies, which got amalgamated with the appellant company, and, therefore, they are not taxable in the hands of the appellant and that the appellant was not the assessee for the purpose under Section 41 - whether the bad debt recovered by the appellant, which was written off by the amalgamating company, which got amalgamated, can be taxed in the hands of the appellant or not ? - HELD THAT:- Section 41 has to be considered as a complete Code by itself, as far as profit is chargeable to tax. Section 41 (1) cannot be read in isolation with Section 41 (4). The assessment contemplated under Section 41 (1) is the same as the assessment contemplated under Section 41 (4). Therefore, merely because there is no corresponding amendment in sub-clause (4), it would not mean that the provisions of Section 41 (1) will not apply. The recovery of the debt is a right transferred along with the numerous other rights comprising the subject of the transfer. If the law permits the transferor to treat the whole or part of the debt as irrecoverable and to claim a deduction on that account, it is difficult to accept that the same right should not be recognised in the transferee. We are of the view that the order of the Appellate Tribunal, confirming the order of the lower authority, is well reasoned and it requires no interference. Decided against assessee.
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