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| The Tax Publishers2020 TaxPub(DT) 4286 (Bang-Trib) INCOME TAX ACT, 1961
Section 36(1)(vii)
After amendment to the law with effect from 1-4-1989 it was not necessary for assessee to establish that debt, in fact, had become irrecoverable in terms of section 36(1)(vii) read with section 36(2). Accordingly, disallowance made by AO on the ground that assessee was not able to show as to how the debts that were written off as bad debts had, in fact, become bad, was not justified.
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Business deduction under section 36(1)(vii) - Bad debts - Disallowance on the ground of failure to prove irrecoverability of bad debts -
Assessee claimed deduction of bad debts under section 36(1)(vii). AO disallowed deduction on the ground that assessee was not able to show as to how the debts that were written off as bad debts had, in fact, become bad and irrecoverable. Held: After amendment to the law with effect from 1-4-1989 it was not necessary for assessee to establish that debt, in fact, had become irrecoverable in terms of section 36(1)(vii) read with section 36(2). Accordingly, disallowance made by AO was not justified.
Relied:TRF Limited v. CIT (2010) 323 ITR 397 (SC) : (2010) 190 Taxman 391 (SC) : 2010 TaxPub(DT) 1481 (SC). Distinguished:Embassy Classic (P.) Ltd. v. Asstt. CIT (2011) 20 Taxmann.com 291 (Bang-Trib) : 2011 TaxPub(DT) 0365 (Bang-Trib)<.i>.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, BANGALORE BENCH
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