TMI Blog2020 (6) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to deduction under Section 36(1)(vii) of the Act. Further held that if an assessee debits an amount of doubtful debt to profit and loss account and credits the asset account like sundry debtors account, it would constitute a right of an actual debt. However, if an assessee debits provision for doubtful debit to profit and loss account and makes a corresponding credit to current liabilities and provisions on the liabilities side of the balance sheet then it would constitute a provision for doubtful debt. It was thus held that in the latter case the assessee would not be entitled to deduction after 01.04.1989. The aforesaid decision was referred to with approval in VIJAYA BANK [2010 (4) TMI 46 - SUPREME COURT] . From the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of IT Act read with Section- 36(2)? (ii) Whether, in the facts and circumstances of the case, is not the finding of the Tribunal that the relevant income was not offered to tax and there was no subsisting debt perverse? 2. Facts leading to filing of the appeal briefly stated are that the assessee is a private limited company, which is engaged in the business of fabrication, erection, commissioning, maintenance of mechanical plants and machineries. The assessee filed its return of income for the Assessment year 2014-15 by declaring total income of ₹ 7,71,76,700/- on 30.11.2014. The assessee filed the revised return of income on 28.11.2015 by declaring total income of ₹ 20,83,75,020/-. The original return of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of VIJAYA BANK VS. CIT , (2010) 323 ITR 166 (SC) is not applicable to the in the fact situation of the case as the assessee is a non-banking and non-finance company and the main issue involved in the case of VIJAYA BANK supra was the apprehension that if the assessee failed to close each and every individual account of its debtors it might result in assessee claiming deduction twice over whereas, the case of the assessee in the instant case is deferment of tax liability to subsequent years. Accordingly, the bad debts written of to the extent of ₹ 11,45,33,140/- were disallowed. 3. The appellant filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by an order dated 20.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to tax in the earlier Assessment year is also not satisfied. In the result, the appeal was dismissed. The assessee thereafter filed a miscellaneous petition against the order of the tribunal, which is pending consideration before the tribunal. In the aforesaid factual background, this appeal has been filed. 5. Learned counsel for the assessee submitted that the sole issue which arises for consideration in this appeal is whether the assessee has written off the debt as bad debt as required under Section 36(1)(vii) read with Section 36(2) of the Act. It is further submitted that assessee has debited the amount of doubtful debt to the profit and loss account and has credited the asset account like sundry debtors account and therefore, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year. In support of aforesaid submissions, reference has been made only to decisions in cases hereinafter referred even though the compilation contains the list of as many as 36 judgments, viz ., VIJAYA BANK VS. CIT , (2010) 323 ITR 166 (SC), T.R.F. LTD. VS. CIT , (2010) 323 ITR 397 (SC), CIT VS. YOKOGAWA INDIA LTD., , (2012) 17 TAXMANN.COM 15 (KAR), CIT VS. KIRLOSKAR SYSTEMS LTD., , (2013) 220 TAXMAN 1 (KAR), CIT VS. VODAFONE ESSAR GUJARAT LTD., , (2017) 397 ITR 55 (GUJ), CIT VS. TAINWALA CHEMICALS PLASTICS INDIA LTD., , (2013) 215 TAXMAN 153 (BOM.), CIRCULAR NO.516 DATED 15.06.1988. 6. On the other hand, learned counsel for the revenue submitted that assessee is required to make a provision for debiting the amount from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was offered to income in Previous year or earlier years, (ii) whether the assessee has debited the amount of doubtful debt to profit and loss account and has reduced the same from the asset side of the balance sheet require determination to decide the claim of the assessee with regard to writing off the bad debt. The Supreme Court dealt with Section 36(1)(vii) of the Act, which was amended with effect from 01.04.1989 in SOUTHERN TECHNOLOGIES LTD. VS. JT. CIT , (2010) 320 ITR 577 . It was inter alia held that after 01.04.1989, a mere provision for bad debt would not be entitled to deduction under Section 36(1)(vii) of the Act. It was further held that if an assessee debits an amount of doubtful debt to profit and loss account and cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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