TMI Blog2014 (4) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ores - Owing to this non-fulfillment of outstanding contracts, the assessee in the passage of time decided to write off these dues in the books of account, which were earlier offered as sales - Commissioner (Appeals) has recorded a very categorical finding that in the audited accounts for the financial year 1998-99 - Findings recorded by Commissioner (Appeals) is wholly in accordance with law as laid down by Hon'ble Supreme Court in TRF Limited [2010 (2) TMI 211 - SUPREME COURT] and the same is confirmed - Do not find any substance in ground raised by Revenue and, accordingly, same is treated as dismissed – Decided against Revenue. Bad Debt - Condition u/s 36(1)(vii) r/w 36(2) – Held that:- Amounts in question represented transactions m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not only the requirement to write-off the amounts in the books of account but the assessee also has to establish that the debt has become bad which has not been done by the assessee. Accordingly, he disallowed the claim of bad debt of Rs. 2,90,68,996. 3. Before the learned Commissioner (Appeals), it was pointed out that in the notes to account, the assessee has given following narration in note no.4, which reads as under:- "4) On the same lines as stated as above in Note No 3, certain old dues from customers have now been written off as Bad Debts to the Profit Loss A/c due to its non-recovery for past number of years owing to shipments defaults by the Firm on subsequent contracts arising out of natural calamity in the form of cy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records were also sent to the Assessing Officer for verification and the remand report was called for. After the remand report, the assessee filed rejoinder submissions in rebuttal, which had been incorporated at Page-5 and 6 of the appellate order. The learned Commissioner (Appeals), after taking note of the Assessing Officer's objection that the details for verification of the bad debt now filed by the assessee should not be accepted as there was no reasonable cause, he rejected the Assessing Officer's objection and admitted the evidence relating to the write-off on the ground that the assessee was prevented by sufficient and reasonable cause, because the main partner was an aged person with ill health. Further, he held that an opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings were pending in the Debts Re~ Tribunal which prevented the appellant from making any alternation in the Balance Sheet as per the rule of Debt Recovery Tribunal and further the fact that the above goods were totally damaged/destroyed running them unfit for export is very clearly stated in the notes to the accounts Schedule-IX for 1998-99 and the subsequent write off during the current year 2006-07 is fully justified especially in view of the following 3 :- i) TRF Ltd. v/s (2010) 323 ITR 395 (SC) ii) DIT Vs Oman International Bank (2009) 313 ITR 128 (Born) iii) CIT Vs Star Chemicals (Bom) P. Ltd. (2009) 313 ITR 126 (Bom) Thus, the objection of the AO in the remand report dt. 22./3/2010 that the appellant failed to prove the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tores. Owing to this non-fulfillment of outstanding contracts, the assessee in the passage of time decided to write off these dues in the books of account, which were earlier offered as sales. The learned Commissioner (Appeals) has recorded a very categorical finding that in the audited accounts for the financial year 1998-99, the auditors have given details of the invoices and also about the natural calamity that had happened in Kandla, which destroyed the goods. It was on account of this reason and on these amounts, the assessee has treated them as bad debt which has been written-off in the books of account in this year. It has also been noted by him that proceedings in this regard were also pending before the Debt Recovery Tribunal and, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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