TMI Blog2012 (9) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... r, in fact, the bad debt or part thereof is written off in the accounts of the assessee. It is not the case of the revenue to disallow any part of such bad debt as has been written off by the lender in its books of accounts. Appeal decides in favour of assessee - ITA No.12/Kol/2011 - - - Dated:- 29-6-2012 - Shri Mahavir Singh, And Shri C.D.Rao, JJ. For the Appellant: Shri A.K. Mahapatra For the Respondent: Shri S.K. Tulsiyan ORDER Per Shri C.D.Rao, AM The above appeal is filed by Revenue against the order dated 02.02.2010 of the ld. CIT-(A)-IV, Kolkata pertaining to A.Yr. 2006-07. 2. There is a delay of 79 days in filing of the appeal by the Revenue for which the revenue has filed a condonation petition explaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Hon ble Supreme Court against the decision of Calcutta High Court in the case of AFT Industries Ltd. vs- CIT (270 ITR 167) in the light of which Ld. CIT(A) decided the issue in favour of the assessee. 4. That the appellant craves for leave to add, delete or modify any of the grounds of appeal before or at the time of hearing. 3. The first ground raised by the revenue in this appeal is relating to bad debt. The brief facts of this issue are that while doing the scrutiny assessment the AO has disallowed an amount of Rs.1,20,06,153/- on account of bad debts by observing that From the Annual accounts of the assessee company it revealed that in the head of Administrative, Selling Other Expenses the assessee has shown expenses fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned that debt in respect of Wisetech Solutions Pvt Ltd. was bad or doubtful or there was no chance of recovery. Moreover, the debtor company is filing its return of income and for the relevant year it filed return showing profit of Rs.5,45,112/-. It is seen that neither the debtor company is insolvent nor is it under liquidation. Therefore, the debt can not be consider as bad and doubtful as per the claim of the assessee. It is well settled in the judgement delivered by Hon ble Calcutta High Court in the case of Coats India Ltd vs CIT that there should be honest judgment on the part of the assessee to consider certain debt as bad and doubtful. From the facts above it is evident that in this case too the consideration of this debt as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if in future any money is recovered it will be duly shown as income from Money Lending Business. From the computation of income it is seen that in the current year the appellant has included Rs.2,89,000 to its income as Bad Debt recovered. 4.4. Under the circumstances, I am inclined to believe that after amendment of Section 36(1)(vii) and Section 36(2)(iii) wef 01-04-1989, any Bad Debt written off in accounts has to be allowed in the year in which it is written off and its is not the case of the department to disallow any part of such Bad Debt as has been written off by the lender in its books of accounts. 4.5. Thus the disallowance of Rs.1,20,06,153 on account of Debit Balance written off is deleted and Loss from Money Lending Busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il 1, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. However, in the present case, the Assessing Officer has not examined whether the debt has, in fact, been written off in the accounts of the assessee. When a bad debt occurs, the bad debt account is debited and the customer s account is credited, thus, closing the account of the customer. In the case of companies, the provision is deducted from sundry debtors. As stated above, the Assessing Officer has not examined whether, in fact, the bad debt or part thereof is written off in the accounts of the assessee. This exercise has not been un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of green leaf as an agricultural income exempted from tax. We dismiss ground no.2 raised by the revenue. 9. The third ground raised by the revenue in this appeal is relating to deletion of addition of Rs.2,36,934/- on account of cess on green leaf. 10. The brief facts of this issue are that the AO while doing the scrutiny assessment disallowed an amount of Rs.2,36,934/- on account of cess on green leaf by observing as under :- The assessee has debited cess on green leaf for Rs.2,36,934/- which relates to agricultural income and therefore not allowable form the business income. Besides this, SLP has been filed before the Honourable Supreme Court. Therefore, also to maintain judicial consistency the amount is disallowed and added b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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