TMI Blog2016 (5) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... s written off as bad debt as income of earlier years. Therefore, the grounds raised by the revenue at this juncture on the issue of taking the amount as income in preceding years in our opinion is without any merit. Nothing has been brought on record by the revenue that assessee has not taken into consideration the said amounts in the income of the preceding assessment order. Since the assessee in the profit and loss account has written off the amount, therefore, in view of the decision of Hon’ble Supreme Court in the case of TRF Ltd. (Supra) assessee is not required to establish that the debt has become irrecoverable. Therefore, the Ld.CIT(A) is justified in deleting the disallowance. - Decided against revenue - ITA No.896/PN/2014 - - - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d advances written off (net) amounting to ₹ 3,74,58,951/-. He, therefore, asked the assessee to produce the details of such write off. The assessee vide letter dated 06-12-2006 submitted the details of sundry balances written off/return back. When asked by the AO to prove the same the assessee only submitted narration of expenses claimed without any documentary evidence. Since the assessee could not establish the genuineness of the amount written off, the AO disallowed the entire amount of ₹ 3,74,58,951/-. 4. Before CIT(A) the assessee submitted that the said amounts were undisputedly taken into account while computing profit of earlier year. Relying on various decisions, it was argued that after the amendment of the law w.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly on the basis of the technical rule of writing off. 7.2 Referring to the decision of the Hon ble Madras High Court in the case of South India Surgical Company Ltd. Vs. ACIT reported in 287 ITR 62 he submitted that the Hon ble High Court in the said decision has held that for claiming bad debt as an allowable deduction the assessee has to prove that those debtors were not in a position financially to pay the debt or had ever refused or expressed their desire not to pay and unilateral act on part of assessee to write off all those amount as bad debts cannot be allowed as deduction u/s.36(1)(vii). He accordingly submitted that the order of the CIT(A) be set aside and that of the AO be restored. 8. The Ld. Counsel for the assessee on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of discharging the proof, the said format of statutory evidence is not an empty formality. It is not necessary for the assessee to prove that the debt has become bad. But at the same time, the assessee cannot convert any live amount into a bad debt only on the basis of the technical rule of writing off. In the present case, even though the amount was not received on the balance-sheet date, the amount was received by the assessee before filing of the return itself. In fact, the balance consideration of the sale transaction covered by the dishonour of the cheque was received by the assessee company on 30.08,2005. The assessee had filed the return of income only thereafter on 29.10.2005. Therefore, it is very clear that when the return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also considered the various decisions cited before us. We find the assessee in the instant case has claimed sundry balance of debtors and advances written off (Net) amounting to ₹ 3,74,58,951/- as bad debt. We find the AO disallowed the same on the ground that assessee could not establish the genuineness of the amount written off. We find the Ld.CIT(A) deleted the disallowance by relying on the decision of Hon ble Supreme Court in the case of TRF Ltd. (Supra). We do not find any infirmity in the order of the CIT(A). We find before CIT(A) the assessee had submitted that the amounts were taken into account while computing the profit of earlier year. In the assessment order although the AO has asked the assessee to prove the genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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