TMI Blog2013 (2) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... bt as irrecoverable and to claim deduction on that account, the same right should be recognized in the transferee. It is merely an incident flowing from the transfer of the business, together with its assets and liabilities, from the previous owner to the transferee. It is implied in the transfer of a business be regarded as belonging to the new owner. Assessee becomes the owner of the assets and liabilities of the subsidiary company, i.e. Mulberry Investments & Trading Co. Ltd. and accordingly the ratio of the judgment of the Honble Supreme Court referred to above would be applicable and the assessee is entitled to write off the principal amount and arrears of interest as irrecoverable – Against the revenue. Further assessee has fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Whether the Appellate Tribunal is right in law and on facts in not appreciating the fact that the assessee company wrote off the debts, which had already become bad, immediately on amalgamation to reduce its taxable income by using colourable device? Though questions are multiple, sole issue which arises for our consideration is in respect of bad debt claimed by the assessee and allowed by the Tribunal. The assessee had claimed certain bad debts which was initially the debts of the mortgagor company, viz. MITCL. The case of the Revenue is that such debt having become bad when there was no amalgamation and MITCL not having claimed the same as bad debt, after amalgamation, the assessee could not have done so. However, it is not in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r humble opinion, the treatment given to the loans and advances by the subsidiary company prior to amalgamation would be a relevant consideration and since the interest income itself has been taxed as business income in the earlier years, the assessee would be entitled to claim the said amount. 19. The Honble Supreme Court in the case of CIT vs. Veerabhadra Rao, K. Koteshwara Rao Co. (155 ITR 152) held that if a business, along with its assets and liabilities, is transferred by one owner to another, a debt so transferred would be entitled to the same treatment in the hands of the successor. The recovery of the debt is a right transferred along with the numerous other rights comprising the subject of the transfer. If the law permits the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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