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TMI Blog2024 (12) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs. 2,65,80,027 made by the assessing officer towards disallowance of bad debts. 3. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that the impugned debts were written off in the books of account and income in respect of these debts was taken into account in computing the income of the appellant for earlier years. 4. Any other grounds may be urged at the time of hearing. 2. The brief facts of the case are that, the appellant company engaged in the business of manufacturing and installation of Solar Module mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten off debts in their books of accounts by crediting individual parties account thereby and debiting the bad debts written off account, but could not file any evidences, as to how the said receivables are bad debts and also not filed any evidences to prove the attempt made by the assessee to recover the debts. Therefore, observed that the assessee's claim of bad debts is not allowable u/s 36(1)(vii) r.w.s.36(2) of the Act. Accordingly, rejected the claim of the assessee in respect of bad debts amounting to Rs. 2,60,80,027/- and added back to the total income. 3. Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A) and submitted that it has satisfied the conditions for claiming deduction towards bad d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut in the present case, the appellant grossly failed to do so. Therefore, by following certain judicial precedents, including the decision of Hon'ble Supreme Court in the case of PCIT Vs. Khyati Realtors Pvt.Ltd. in Civil Appeal No.672/2020, judgement dated 25.08.2022, rejected the claim of the assessee and sustained the additions made by the Assessing Officer towards disallowance of bad debts. 5. Aggrieved by the Ld.CIT(A) order, the assessee is in appeal before the Tribunal. 6. The learned Counsel for the assessee submitted that the Ld.CIT(A) erred in facts and in law in upholding the additions made by the Assessing Officer towards disallowance of bad debts written off without appreciating that as per the decision of Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside and additions made by the Assessing Officer towards bad debts should be deleted. 7. Ld.DR on the other hand, supporting the order of the Ld.CIT(A) submitted that the Assessing Officer and the Ld.CIT(A) brought out clear facts to the effect that the claim of the assessee towards bad debt written off is not in accordance with the provisions of section 36(1)(vii) r.w.s. 36(2) of the Act. The assessee could not prove the write off of bad debts in light of relevant provisions to the satisfaction of the Assessing Officer that the said bad debts have become bad. Further, the appellant has also failed to file relevant evidences to prove any efforts made for recovery of the bad debts. Since the appellant could not prove the bad debts, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f TRF Ltd. Vs.CIT (supra), held that in order to claim deduction towards bad debt, the only requirement is actual write off of bad debts as irrecoverable in the books of accounts of the assessee for that previous year and it fulfils the condition stipulated u/s 36(2) of the Act. The Tribunal has also taken support from Circular No.12/2016 dated 30.05.2016 issued by the CBDT, where, the CBDT had instructed its field officers to allow claim for deduction towards bad debts, if it is written off as irrecoverable in the books of accounts in the light of decision of Hon'ble Supreme Court in the case of TRF Ltd. Vs. CIT (supra).The sum and substance of ratio laid down by Hon'ble Supreme Court in the case of TRF Vs. CIT and later followed by IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of the Ld.CIT(A) in light of the decision of Hon'ble Supreme Court in the case of PCIT Vs.Khyati Realtors Pvt.Ltd.(supra). We find that the issue before the Hon'ble Supreme Court in the above case is whether, the alternate claim of the assessee towards deduction for bad debts written off, which was disallowed and confirmed by the Assessing Officer can be allowed as deduction u/s 37(1) of the Act. The Hon'ble Supreme Court in para 23 has discussed the issue and held that once a particular claim is disallowed under specific provisions of section 30 to 36 of the Act, then section 37 cannot come in. Section 37 applies only to items which do not fall in section 30 to 36 of the Act. If a provision for doubtful debt is expressly e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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