TMI Blog2016 (10) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... by squaring up individual accounts of the debtors, but what is not in dispute that the provision in question has been debited to the profit and loss account, and the amount of provision is reduced from the loans and advances appearing in the balance sheet. With these facts having been verified by us with respect to material on record, we find that the issue is squarely covered in favour of the assessee in the case of CIT vs. Nawanagar Co-operative Bank Limited [ 2014 (7) TMI 911 - GUJARAT HIGH COURT] . - Decided in favour of assessee. - I.T.A. No.335/Ahd/2011 - - - Dated:- 27-10-2016 - Mr R. P. Tolani, J.M. And Mr Pramod Kumar, A.M. For The Appellant : Mr Surendra Kumar For The Respondent : Mr P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n facts in not appreciating that the individual amounts of advances were not actually written off from the books of the assessee and as such, the said provision of ₹ 88,38,79,657/- for bad debts was not an allowable expenditure. 3. On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 3. Briefly stated, the relevant material facts are as follows. The assessee before us is a public sector undertaking engaged in the business of leasing and finance business. Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he honourable Supreme Court in the case of M/s TRF Ltd. vs. CIT reported in 323 ITR 397 (SC) wherein the honourable Supreme Court has held that it does not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt written off as irrecoverable in the account of the assessee. In view of the above, addition of ₹ 36,11,57,53 6/- made by the AO is not justified. The same is deleted. 6.3 I have gone through the assessment order and the submissions of the AR carefully. It is seen that the appellant had created a provision of bad debt account and out of this account a sum of ₹ 88,38,79,657/- has been written off. The AR h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of TRF Limited vs. CIT (323 ITR 397) which holds that a mere write off of the bad debts in the books of account, as irrecoverable, is sufficient to claim deductions as bad debts. Learned CIT(A) was, therefore, quite justified in granting relief to the assessee on this issue. As far provision of ₹ 88,38,79,657/- is concerned, undoubtedly there is nothing on record to show, or even indicate, that these amounts have actually been written off by squaring up individual accounts of the debtors, but what is not in dispute that the provision in question has been debited to the profit and loss account, and the amount of provision is reduced from the loans and advances appearing in the balance sheet. With these facts having been verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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