TMI Blog2012 (8) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has erred in deleting the disallowance of ₹ 3,63,31,532/- being bad debts written off. ii) On the facts and in the circumstances of the case and in law the Ld. Commissioner of Income Tax (A) erred in not appreciating that the debts written off by the assessee had actually become bad and hence wrongly deleted the addition on that account. iii) On the facts and in the circumstances of the case and in law the Ld. Commissioner of Income Tax (A) has erred in directing that the expenditure of ₹ 26,29,614/- incurred on renovation of electrical fittings etc. be treated a revenue expenditure as against of capital nature held by the Assessing Officer. iv) The appellant craves leave for reserving the right to amend, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Veerabhadra Rao 155 ITR 152, it was eligible to claim and be allowed deduction of bad debts of its predecessor. Further assessee relied upon the decision of the Mumbai High Court in the case of Ld. D.I.T. (Int. Taxation) vs. Oman International Bank (313 ITR 128) to contend that after the amendment to Section 36(1)(vii) from assessment year 1989-90, once an assessee records a debt as a bad debt it prima facie establishes that it was a bad debt. Assessing Officer further observed that the case laws relied upon the by the assessee were not relevant. He accordingly, rejected the claim of bad debt amounting to ₹ 3,63,31,432/-. 5. Upon assessee s appeal Ld. Commissioner of Income Tax (A) noted that the Hon ble Apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of business, be regarded as belonging to the new owner .. It seems to us that even if the debt had been taken into account in computing the income of the predecessor firm only and had subsequently been written off as irrecoverable in the accounts of the assessee, the assessee would still have been entitled to a deduction of the amount written off as a bad debt. It is not imperative that the assessee referred to in sub-cl. (a) must necessarily mean the identical assessee referred to in sub-cl. (b). A successor to the pertinent interest of a previous assessee would be covered within the terms of sub-cl.(b). The successor assessee, in effect, steps into the shoes of his predecessor. Accordingly, we hold that the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, the case law relied upon by the Ld. Commissioner of Income Tax (A) are squarely applicable on the facts of the case. Hence, respectfully following the above precedents from the Apex Court, we affirm the order of the Ld. Commissioner of Income Tax (A). Hence, the claim of bad debt is allowed. 10. Apropos issue of expenditure of ₹ 26,29,614/- incurred on renovation of electrical fitting etc. On this issue Assessing Officer noted that assessee has incurred of ₹ 16,30,169/- towards flooring of the premises. From the bills of the party Assessing Officer noted that renovation has taken place and fresh flooring, tiling and furniture work has been carried out by the assessee. Assessing Officer further observed that ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture. 12. Against the above order the Revenue is in appeal before us. 13. We have heard the rival contentions in light of the material produced and precedent relied upon. Ld. Departmental Representative submitted that before the Ld. Commissioner of Income Tax (A) assessee has submitted that the renovation / additions were made in the leased premises. Ld. Departmental Representative further submitted that this fact was not disclosed before the Assessing Officer. Hence, she contended that the matter may be remitted to the file of the Assessing Officer to give a finding regarding the ownership of the premises. 14. We have carefully considered the submissions and perused the records. In our considered opinion, interest of j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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