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2023 (4) TMI 338 - AT - Income TaxRevision u/s 263 by CIT - Allowability of bad debts (debit balances written off) - As per CIT no verification of the bad debts written off was done by the AO during the course of assessment proceedings to verify whether the claim is in accordance of the provisions of section 36(2) of the Act which shows that the Assessing Officer has not applied his mind to the facts of the case - HELD THAT:- During the course of original assessment proceedings, the assessee had given all details of debts and steps were taken by the assessee for recovery of those amounts, which he ultimately failed to recover. AO allowed the deduction after taking into consideration the details filed by the assessee. CIT initiated 263 proceedings on the ground that the claim was not allowable u/s. 36(2) of the Act. In appeal before Tribunal, the ITAT [2007 (3) TMI 313 - ITAT HYDERABAD-A] held that the assessee had categorically submitted the details of bad debts before the Assessing Officer during the course of assessment proceedings and the same were considered by the Assessing Officer. Accordingly, the ITAT set aside the 263 order passed by the PCIT. In further appeal to the High Court by the Department, the High Court [2011 (4) TMI 805 - DELHI HIGH COURT] held that the PCIT in the instant facts was not justified in setting aside the order of the Assessing Officer and invoking revisional power u/s. 263 of the Act. Thus we are of the considered view that the ld. PCIT has erred in facts and in law in holding that the order passed by the ld. Assessing Officer is erroneous and prejudicial to the interest of revenue - Decided in favour of assessee.
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