TMI Blog2015 (11) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples, now stands covered in favour of the assessee by the judgment of Hon’ble Supreme Court in the case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT ] wherein it has been held that in view of the amended law, the assessee is now required to merely show the write off of the debts, and the establishing a debt as ‘bad’ is not mandatory. Therefore, on legal principle, we hold that the impugned claim is allowable to the assessee. We send this issue back to the file of the AO for the limited purpose of verification of the details as were required by the Ld CIT(A) and which were allegedly not filed by the assessee. - Decided in favour of assessee for statistical purposes. - ITA NO.8047/Mum/2010 - - - Dated:- 29-9-2015 - Shri Joginder Singh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 The appellant prays that the assessing officer be directed to give appropriate direction in this matter to delete the disallowance of ₹ 908, 193. 2 Ground No.2: Disallowance of Bad Debts of ₹ 211,109 2.1 On the facts and circumstances of the case and in law, the ACIT erred in disallowing the bad debts claim of ₹ 211,109. 2.2 The appellant submits that the CIT(Appeals) failed to appreciate the fact that the debts were written off as 'bad' as claimed as deduction since there has not been any recovery from the parties. The CIT(Appeals) ought to have allowed the deduction of bad debts in accordance with section 36(1)(vii) read with section 36(2) of the Act. 2.3 The appellant prays for due rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited by law . But the AO was not satisfied and aforesaid amount was disallowed by invoking explanation to section 37 of the Act. 3.2. Being aggrieved, the assessee carried the matter to the Learned Commissioner of Income Tax (hereinafter called as Ld CIT(A) }, wherein detailed submissions were made by the assessee company. But the Ld CIT(A) was not satisfied and disallowance made by the AO was confirmed. Being aggrieved again, the assessee has filed the present appeal before the tribunal. 3.3. During the course of hearing before us, Ld counsel had made detailed arguments and reiterated most of the submissions made by the assessee company before the authorities below. In addition to that, he has relied upon the judgment of Hon ble Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of an action which is prohibited by law, and, in all the given situations, no element of any consent of the parties involved can bring any change in its legal consequences. Similarly, any amount paid by the assessee, in the form of compensation, as a consequence of breach of contract between the two parties, cannot be said to be amount paid for any purpose which is an offence , prohibited by the law. In other words, under the income tax law, one is required to go into the real nature of the transactions and not to the nomenclature that may have been assigned by the parties. Thus, to decide such issues, we are required to see real substance under the Income Tax Law, and not merely its form. Thus, only those payments, which have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to sec. 37(1). It is only a case of certain irregularities committed while carrying on the business in normal course. Various benches of the tribunal have consistently taken view in assessee s favour in such circumstances. The ld. AR has placed on record copies of such order in Goldcrest Capital Markets Ltd. Vs.ITO [(2010) 130 TTJ 446 (Bom) and Master Capital Services Ltd. Vs. DCIT [(2007) 108 TTJ 0389 (Chd.)], etc. In our considered opinion, the learned CIT(A)was justified in ordering for the deletion of this addition. We, therefore, uphold the impugned order. 3.7. We find that the facts in this year are same. Nature of expenses incurred in the name of fines or penalties are same as have been incurred in assessment year 2007-08. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that debt had become bad . Therefore, both of the lower authorities have erred in making the disallowance. Ld counsel also drew our attention to the evidences providing requisite details with regard to the impugned amount of ₹ 2,11,109/- and also relied upon the judgment of Hon ble Supreme Court in the case of TRF Ltd. vs. CIT 323 ITR 397. 4.4. On the other hand, Ld DR relied upon the orders of authorities below. 4.5. We have gone through the submissions made by both the sides. We find that this issue, on legal principles, now stands covered in favour of the assessee by the judgment of Hon ble Supreme Court in the case of TRF Ltd., supra, wherein it has been held that in view of the amended law, the assessee is now required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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