TMI Blog2021 (4) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... d debts. HELD THAT:- We find that the Tribunal in the case of various similarly situated assesses has allowed write off of bad debts where the assessee has failed to recover the amount from transactions at NSEL. In the case of Megh Sakariya International P. Ltd. [ 2018 (9) TMI 1961 - ITAT CHENNAI] the Tribunal allowed the claim of bad debts arising from trading of commodity at NSEL in accordance with principle laid down in the case of TRF Ltd. [ 2010 (2) TMI 211 - SUPREME COURT] It is no more res-integra that for write off of bad debts as irrecoverable, the assessee is not under obligation to show that the debt has in fact become irrecoverable. Now, the only requirement as per the provisions of section 36(1)(vii) is that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thy, Member (J) This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)- 42, Mumbai (in short 'the CIT(A)') dated 16/05/2019 for the assessment year 2015-16. 2. Shri Akshay J. Shah appearing on behalf of the assessee submitted that the solitary issue raised in the appeal is against disallowance of assessee's claim of write off of bad debts. Narrating the facts of the case, the ld. Authorized Representative for the assessee submitted that assessee had filed his return of income for the impugned assessment year on 31/08/2015 declaring total income of ₹ 18,48,070/-. Thereafter, the assessee filed revised return of income on 30/03/2017 claiming loss of ₹ 5,04,601/- which in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same were neither considered by the Assessing Officer nor the CIT(A). The ld. Authorized Representative for the assessee submitted that the issue raised in the appeal is squarely covered by the decision of Tribunal in the case of M/s. Megh Sakariya International P. Ltd. vs. DCIT, in ITA No. 59/CHNY/2018 for assessment year 2014-15 decided on 05/09/2018. The ld. Authorized Representative for the assessee to further buttress his submissions placed reliance on the following decisions: (i) Remi Securities Limited vs. ACIT, ITA No. 3649/Mum/2018. (ii) The Jt. CIT (OSD)2(10(1) vs. M/s. Aditya Commodities Pvt. Ltd. ITA No. 1971/Mum/2018. (iii) M/s. Remi Sales and Engineering Limited vs. ACIT ITA No. 3650/Mum/2018 (iv) Omni Len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to contend that write off of bad debts has to be allowed in the year of claim. 5. We have heard the submissions made by rival sides and have examined the orders of authorities below. We have also considered the decisions and documents on record, on which ld. Authorized Representative for the assessee has placed reliance. The assessee has claimed write off of bad debts in respect of amount not recoverable from transactions at NSEL. We find that the Assessing Officer has not considered the claim of the assessee at all though the assessee had made submissions before the Assessing Officer during the assessment proceedings on two occasions i.e. on 26/09/2017 and again on 16/10/2017. The communication on behalf of assessee is available at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .... We have given a thoughtful consideration and are unable to persuade ourselves to subscribe to the view taken by the lower authorities. As per the post-amended Sec. 36(1)(vii), as had been made available on the statute vide the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 01.04.1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the 'debt' is 'written off' as irrecoverable in the accounts of the assessee. Admittedly, in the case before us, the assessee company had 'written off' 25% of the balance outstanding from NSEL i.e. ₹ 1,98,70,000/- as a 'bad debt' in its books of accounts for the year under consideration. As observed by us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verable, the assessee is not under obligation to show that the debt has in fact become irrecoverable. Now, the only requirement as per the provisions of section 36(1)(vii) of the Act is that the assessee has to write off the debts as irrecoverable in the accounts. In the present case, the assessee in its books has written off the amount from NSEL as bad debt. Once the assessee has written off bad debts in its book, there is no justification in rejecting the claim of assessee. The Board has issued Circular No. 17/2016 dated 30/05/2016 regarding admissibility of claim of deduction of Bad Debts under section 36(1)(vii) r.w.s. 36(2) of the Act. The CBDT has accepted the law explained by the Hon'ble Supreme Court of India in the case of TRF ..... X X X X Extracts X X X X X X X X Extracts X X X X
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