TMI Blog2016 (5) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of the proposition laid down in the case of TRF Limited [2010 (2) TMI 211 - SUPREME COURT ], the claim of the assessee pertaining to bad debts, the ld. CIT(A) was correct in granting relief to the assessee as the assessee had written off the claimed amount in bad debts in its books of account during the previous year and there was no requirement to establish this fact that the debts have become bad debts in the previous year after 1.4.1989 there was no requirement to show and efforts of recovery and to establish that the debts have become debts despite of sincere and all possible efforts of the assessee. - Decided in favour of assessee - ITA No. 6047/Del /2013 - - - Dated:- 18-3-2016 - Shri G. D. Agrawal, Vice President And Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making impugned disallowance of amount of bad debts as claimed by the assessee in the return of income. The assessee carried the issue before the ld. CIT(A) who allowed the appeal of the assessee by deleting the addition. Now the aggrieved Revenue is before this Tribunal by raising the sole ground as raised hereinabove. 5. We have heard the arguments of both the sides and carefully perused the relevant material placed on record before us. The ld. DR strongly supported the action of the AO and contended that huge amount as bad debts cannot be allowed when the assessee had written off the same without taking any action of recovery. The ld. DR vehemently contended that the assessee had not made any efforts to recover the huge amounts. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e written off in the books from the year under consideration. The appellant has made reference of the judgment of Hon'ble Supreme Court in the case of TRS Ltd. vs. CIT (supra) as well as jurisdictional Hon'ble High Court of Delhi and Hon'ble ITAT Delhi in the case of CIT vs DCM Ltd (supra) and Triveni Engineering and Industries Ltd. vs. DCIT (supra) respectively. In the summary of these judgments, the Hon'ble Courts have held that: No prudent businessman will write off a debt which he has a hope of recovering When a businessman writes off a debt as bad it must be presumed that it was bad and irrecoverable, unless contrary was shown Writing off a bad debt is a prime evidence and sufficient requirement of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per the amended provision of clause (vii) of section 36(1) of the Act, subject to the provisions of sub-section (2) of section 36, the amount of any bad debts or part thereof which is written off as bad debts as irrecoverable in the accounts of the assessee, the provisions shall be allowed. Hence, the basis of disallowance adopted by the AO is perverse and misconceived and against the letters and spirit of relevant provisions of section 36(1)(vii) of the Act which is not sustainable and the same was rightly dismissed by the ld. CIT(A). 9. In view of the factual position of the case and in the light of the proposition laid down by the Hon'ble Supreme Court in the case of TRF Limited [supra], the claim of the assessee pertaining t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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