New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 626 - ITAT JAIPUR

2015 (11) TMI 626 - ITAT JAIPUR - [2015] 43 ITR (Trib) 134 (ITAT [Jai]) - Disallowance of bad debts - Held that:- The assessee was carrying out commission business and having business dealings with farmers which is not disputed by the lower authorities. As held by the hon'ble Supreme Court in the case of T. R. F. Ltd. v. CIT [2010 (2) TMI 211 - SUPREME COURT] if the assessee has written off bad debts as irrecoverable in the accounts of the assessee, the claim is to be allowed under section 36(1) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- Decided in favour of assessee. - I. T. A. No. 345 /JP/ 2013 (assessment year 2007-08). - Dated:- 11-8-2015 - R. P. TOLANI (Judicial Member) B. L. Bhojwani for the appellant. Kailash Mangal for the respondent. ORDER 1. R. P. Tolani (Judicial Member).-The appeal is filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals), Kota dated January 21, 2013 for the assessment year 2007-08. The sole ground raised by the assessee is as under : "That the learned Comm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rough him. In the relevant year the assessee earned commission income of ₹ 24,52,939 and claimed write off of bad debts amounting to ₹ 2,20,870. According to the Assessing Officer, the assessee did not produce adequate evidence to establish that debt has really become bad. The debts were outstanding since last 3-6 years. The Assessing Officer, however, disallowed the claim by the following observations : "The reply of the assessee was considered but not found satisfac tory. It i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

come bad debts. Writing off is only one of the conditions to claim deduction for bad debts. The other condition is that debt has become bad debt." 3. Aggrieved, the assessee preferred first appeal. However, the learned Commissioner of Income-tax (Appeals) held that the provisions of section 36(1)(vii) are subjected to provisions of section 36(2) and since the assessee is not in money lending business, the claim could not be allowed. Apropos the assessee's contention that it may be allow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se debts has also not been disputed which is reflected by the finding that they were continuing for the last 3-6 years. The genuineness thereof is not under challenge and there is no doubt that debts have actually become bad. 5. Both the lower authorities have denied the claim on the following observations : (1) The assessee has failed to establish that the debts have actually become bad. (2) The assessee is not a money lender in terms of section 36(2). (3) The claim is not allowable under secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

with sub-section (2) of the section laid down conditions necessary for allowability of bad debts. It was provided that the debt must be established to have become bad in the previous year. This led to enormous litigation on the question of allowability of bad debt in a particular year, because the bad debt was not necessarily allowed by the Assessing Officer in the year in which the same had been written off on the ground that the debt was not established to have become bad in that year. In ord .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see to establish that the debt has actually become bad. Further, reliance is placed on various judgments, out of which main judgments are as under : (i) T. R. F. Ltd. v. CIT [2010] 323 ITR 397 (SC) ; (ii) Deputy CIT v. Oman International Bank SAOG [2006] 286 ITR (AT) 8 (Mum) [SB] ; (iii) CIT v. Autometers Ltd. [2007] 292 ITR 345 (Delhi) ; (iv) CIT v. Krone Communication Ltd. [2011] 333 ITR 497 (Karn) ; and (v) CIT v. Morgan Securities and Credits P. Ltd. [2007] 292 ITR 339 (Delhi). 8. Apropos th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version