TMI Blog2011 (12) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... the same under Section 41, we do not think such a safety provision will entitle the assessee to claim bad debt as a deduction without satisfying the conditions contained in Section 36(l)(vii) - Appeal is dismissed - IT APPEAL NO. 38 OF 2003 - - - Dated:- 20-12-2011 - C.N. RAMACHANDRAN NAIR AND K. VINOD CHANDRAN, JJ. Dr. K.B. Muhamed Kutty and K.M. Firoz for the Appellant. P.K.R. Menon and Jose Joseph for the Respondent. JUDGMENT C.N. Ramachandran Nair, J. This is an appeal filed under Section 260A of the Income-tax Act against the Single Bench order of the Tribunal declining to interfere with the order issued by the Commissioner under Section 263 of the Income-tax Act directing revision of assessment for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite off of bad debt while finalising the accounts for the relevant previous years, the Tribunal did not go into the question as to whether the debts had become irrecoverable. It is against this order of the Tribunal assessee has come up in appeal before us. 3. Before us Senior counsel has relied on the decision of the Delhi High Court in CIT v. Global Capital Ltd. [2008] 306 ITR 332 and that of the Patna High Court in Lawlys Enterprises (P.) Ltd. v. CIT [2009] 314 ITR 297 wherein both the High Courts have held that in order to claim deduction under Section 36(l)(vii) under the amended provisions after 1st April, 1989, the assessee need not prove debt as irrecoverable or bad, but it is enough the assessee writes off the debt. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are unable to accept this proposition because Profit and Loss Account is the final computation of profit made by the assessee based on which assessment has to be made. Unless bad debt is written off by debiting the Profit and Loss Account which necessarily means that the debtors' account should be credited or so much of the amount debited in the Profit and Loss Account should be written off from amount due from the debtors, the writing off as contemplated under Section 36(l)(vii) is not satisfied. Even though counsel for the appellant-assessee contended that when bad debt is recovered, there is provision for assessment of the same under Section 41, we do not think such a safety provision will entitle the assessee to claim bad debt as a de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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