TMI Blog2020 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... should be reduced from total turnover while computing deduction under Section 10A - HELD THAT:- Issue decided in favour of assessee as relying on own case [ 2020 (11) TMI 379 - KARNATAKA HIGH COURT] - Substantial questions of law Nos.1 to 3 are answered against the revenue and in favour of the assessee. Disallowance of bad debts written off - Whether the tribunal was correct in allowing the write off as bad debt in the facts and circumstances of the present case, when invoices were raised few months prior to the write off of the debtors were reputed companies including Government undertakings and business was continued with the debtors by the assessee without establishing the debt has become bad and recorded a perverse finding? - HEL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the revenue. The subject matter of the appeal pertains to the Assessment year 2002-03. The appeal was admitted by a bench of this Court vide order dated 28.03.2012 on the following substantial questions of law: (i) Whether the tribunal was correct in holding that whether the appellate authority were correct in holding that maintenance of separate accounts for STP units and non STP units was only directory and not mandatory in accordance with RBI conditions, Government Notification and Income Tax Act? (ii) Whether the Appellate Authority were correct in holding that payments made to sub contractors who have separately exported and have been issued foreign inward remittance certificate and have also claimed 10A deduction will al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en off as irrecoverable in the accounts of the assessee. However, the tribunal in the instant case, has not satisfied itself with the aforesaid requirement and therefore, the matter deserves to be remitted to the tribunal. On the other hand, learned Senior counsel for the assessee has invited our attention to the compilations filed before the tribunal and has invited our attention to the details of the debts written off by the customers and has relied on the judgments in 'T.R.F. LTD. VS. COMMISSIONER OF INCOME-TAX', (2010) 323 ITR 397 (SC) and decisions of this court in 'COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE VS. FUSION SOFTWARE ENGG. (P.) LTD.', (2012) 18 TAXMANN.COM 57 (KARNTAKA), 'COMMISSIONER OF INCOME TAX, BAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that - Once the assessee writes off the debt as irrecoverable, his claim for deduction cannot be rejected on the ground that the debt has not been established to have become irrecoverable. The aforesaid position is also supported by the amendment made to S.36(2) w.e.f.1st April 1989 and any doubt, if remaining, has been clarified by Circular No.551 dated 23rd January, 1990. (iii) The Hon'ble Bombay High Court, in the case of CIT vs. Star Chemicals (Bombay) P. Ltd. reported in (2009) 313 ITR 126 (Bom), in its wisdom had held that under Section 36(1)(vii) of the Income Tax Act, 1961 and Circular No.551 dated January 23, 1990 if the assessee had written off the debt as a bad debt that would satisfy the purpose of the Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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