TMI Blog2023 (5) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has already suffered the tax. Any adjustment made by the assessee on account of the bad debts against the provisions created in the earlier year amounts to actual writing off the bad Debts in the books of accounts. Thus, the assessee cannot be denied the benefit for the bad debts merely on the reasoning that such bad debts were not claimed in the profit and loss account but adjusted against the provision of bad debts. Appeal of the assessee is allowed. Admittedly, the provision was created by the assessee in the earlier year out of the profit and loss account. Thus, any adjustment against such provision for bad and doubtful debts amounts to actual writing off the bad debts. Thus, we set aside the finding of the CIT(A) and direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed be allowed. 3. The solitary issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowance made by the AO on account of bad debts written off for ₹ 69,33,446.00 on the reasoning that it has not been written off in the books of accounts. 4. The necessary facts arising from the order of the authorities below are that the assessee in the present case is a limited company and engaged in the business of manufacturing and selling textile machinery, spares, and job work. The assessee in the year under consideration has written off bad debts of ₹ 36,75,000 in the profit and loss account. The assessee, likewise, has also written off the bad debts amounting to ₹ 69,33,446.00 in the compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten off in the books of account. Therefore, respectfully following the decision of Hon'ble Supreme Court, the Assessing Officer has directed to allow claim of bad debt of Rs.36,75,000/- only and balance amount is confirmed. Thus appellant, succeeds partly in respect of Ground Nos. 3 3.1. 6. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 7. The learned AR before us filed paper books running from pages 1 to 377 and contended that the assessee has created provision for bad debts amounting to Rs. 69,33,446.00 in the earlier year in the profit and loss account which was disallowed and added back to the total income of the assessee. However, the assessee in the year under consideration has w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) concluded that the assessee has not written off bad debts to the tune of Rs. 69,33,446.00 in the books of accounts and therefore, he disallowed the same. We are not in agreement with the finding of the learned CIT(A) on the reasoning that the assessee has not written of the bad debts amounting to ₹ Rs. 69,33,446.00 against the provision for the bad debts which has already suffered the tax. This fact can be verified from the submission of the assessee before the ld. CIT(A) which is reproduced as under: Particulars Amount (Rs.) Total amount of bad debts written off 1,06,07,826 Less: Bad debts written off against the provision m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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