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2006 (1) TMI 111 - HC - Income Tax
Deduction under section 36(1)(vii) – bad debt – it was an admitted fact that there is nothing on record which might show that all these debtors were either financially not in a position to pay the debt or have ever refused or expressed a desire not to pay. On the contrary, the assessee was still carrying on business with all these debtors and receiving payments. It was the unilateral act on the part of the assessee to write off all these amounts as bad debts, without there being any material to show that the amounts are not recoverable. - Tribunal is right in law in holding that the debt claimed by the appellant as bad had not become bad and thus is not allowable as deduction under section 36(1)(vii)