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2009 (12) TMI 99 - MADRAS HIGH COURTCan interest amount be allowed as bad debts – rectification of mistake – error apparent on records - For the assessment year 1983-84, an order of assessment was passed by the assessing officer disallowing the deductions sought for by the assessee towards the bad debts for a sum of Rs.51,19,096/- and also the interest for a sum of Rs.15,85,017/-. The assessee has sought deduction for the above said amount of Rs.51,19,096/- out of the total amount of Rs.66,82,375/- which is inclusive of the interest amount of Rs.15,85,017/- kept by the assessee in the suspense account. The assessee has been following the mercantile system of accounting and the interest has been accounted on accrual basis. Since the assessee has been disputing that the interest is not exigible to tax he has not included the said amount in the bad debts claimed by the assessee. CIT(A) and ITAT allowed the deduction of whole amount as bed debts – Assessee consequent to CIT(A) order filed an application for rectification u/s 154 to claim deduction of Rs. 15,85,017/- as bed debt which was not claimed earlier – AO and CIT(A) held there was no error apparent on record and rejected the application u/s 154 – ITAT allowed the rectification u/s 154 – held that - The record for the purpose of section 154(1) is the record available to the authorities at the time of initiation of proceedings for rectification and not merely the record of the original proceeding sough to be rectified – decided against the revenue
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