TMI Blog2013 (3) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment, it needed to be allowed in the year it was written off in the books. As held in T.R.F. Ltd. Vs/. Commissioner of Income-tax reported in [2010 (2) TMI 211 - SUPREME COURT] after the amendment of section 36(1)(vii) in order to obtain a deduction of bad debts, it is not necessary for the assessee to establish that the debt, in fact, had become irrecoverable; it is enough if the bad debts are written off as irrecoverable in the accounts of the assessee. Also in the case of CIT V.T. Veebadhrarao & K. Koteshwerarao & Co. & Co. [1974 (1) TMI 23 - ANDHRA PRADESH HIGH COURT] it was opined that once firm/company is taken over by the successor-firm, the successor-firm can claim deduction of the predecessor firm under Section 36(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case, the learned ITAT has erred in appreciating the fact that the sole objective to postpone claim of bad debts of amount, which had already become bad before amalgamation, was to evade tax liability that the business loss of amalgamating company which is not industrial company could not be allowed the set of in the hand of amalgamated company? (c) Whether in the facts and circumstances of the case, the learned ITAT has erred in law in rejecting the Revenue's appeal against the order of CIT(A) deleting the addition of Rs.2,67,960/- on account of late payment of employees' provident fund contributions u/s. 36(1)(va) of the Act? 2. Question (c) pertains to addition of Rs.2,67,960/- made by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee company was engaged in the business of printing of new papers, it does not satisfy such criteria and cannot be stated to be an industrial undertaking . Assessee carried the matter in appeal and contended that such an issue was decided in favour of the assessee in the Assessment Year 2003-2004 by the Commissioner (Appeals), against which, no further appeal was preferred. In the present year also, the Commissioner reversed the order of the Assessing Officer. 4. Revenue preferred an appeal before the Tribunal. The Tribunal rejected the revenue's appeal observing as under: 5. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant along with the judicial decision relied upon. I am inclined to agree with the appellant's contentions. It is only at the discretion of the appellant to decide when the bad debts have become bad and after the amendment in section, the Deptt. cannot examine the year in which the debt has become bad and it has to be allowed in the year in which it is written off in the books. When the amalgamation took place, all the assets and liabilities pass to the appellant company and if there is any bad debts to be written of after that date, it has to be written off by the present appellant and if there is any income, it has to be assessed in the hands of present appellant. In light of the facts and circumstances narrated above, I hold that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to obtain a deduction of bad debts, it is not necessary for the assessee to establish that the debt, in fact, had become irrecoverable; it is enough if the bad debts are written off as irrecoverable in the accounts of the assessee. 7. Further in the case of CIT V.T. Veebadhrarao K. Koteshwerarao Co. Co. 102 ITR 604, the Apex Court opined that once firm/company is taken over by the successor-firm, the successor-firm can claim deduction of the predecessor firm under Section 36(2) of the Act. 8. We are of the opinion that the Assessing Officer wrongly placed reliance on Section 72A of the Act. Section 72A pertains to carry forward and set off of the accumulated loss and unabsorbed depreciation allowance in case of amalgama ..... X X X X Extracts X X X X X X X X Extracts X X X X
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