TMI Blog2022 (11) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is entitled to claim the deduction by way of writing off bad debts of these sundry debtors within the meaning of the provision of section 36(1)(vii) - Thus, we set aside the order of the CIT(A) and direct the AO to allow the deduction for the bad debts only. Thus, ground of appeal of the assessee is partly allowed. - ITA No. 1038/AHD/2014 - - - Dated:- 9-11-2022 - SHRI WASEEM AHMED , ACCOUNTANT MEMBER And SHRI SIDDHARTHA NAUTIYAL , JUDICIAL MEMBER Assessee by : Shri B. R. Popat , A. R Revenue by : Shri Atul Pandey , Sr. D. R ORDER PER WASEEM AHMED , ACCOUNTANT MEMBER : The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-XX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the Ld. CIT(A) has not allowed the bad debts under the provision of section 36(1)(vii) of the Act amounting to Rs. 22,43,329/- only. 5. The facts in brief are that the assessee in the present case is a private limited company and claimed to be engaged in the business of shipbreaking. The assessee in the year under consideration has shown certain credit entries amounting to Rs. 22,43,329/- in the bank account, representing the receipt from M/s JD Steel and its other associates concerns. 6. However, the assessee failed to justify the credit worthiness of the parties and genuineness of the transaction in the manner provided u/s 68 of the Act. Therefore, the same was treated as unexplained cash credit u/s 68 of the Act by the AO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR before us filed a paper book running from pages 1 to 6 and submitted that the authorities below have made the addition receipts aggregating to Rs. 22,43,329/- treated the same as unexplained cash credit u/s 68 of the Act, but after ignoring the fact that the sum of Rs.16,43,329/- was adjusted against the outstanding debtors. Thus it was submitted by the Ld. AR that there is no grievance to the assessee if the addition to the extent of Rs. 22,43,329/- is sustained under the provision of section 68 of the Act, but the deduction of Rs. 16,43,329/- should be allowed under the provision of section 36(1) (vii) of the Act on account of the bad debts. In other words, the Ld. AR agreed for the addition of Rs. 6 lacs out of the total addition of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2004 SLM Steel 1,43,329.00 Total 16,43,329.00 12.1 Indeed, the amount of unexplained cash credit was adjusted by the assessee against the debtors meaning thereby the debtors in the books of accounts of the assessee were written off on account of such adjustment. However, the authorities below treated the sum of Rs. 16,43,329/- as unexplained cash credit u/s 68 of the Act. Thus, there remains no ambiguity to the fact that assessee has made its debtors at NIL value and accordingly the assessee is entitled to claim the deduction by way of writing off bad debts of these sundry debtors within the meaning of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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