|
The Tax Publishers2012 TaxPub(DT) 1912 (Ker-HC) : (2012) 046 (I) ITCL 0301 : (2012) 249 CTR 0210 : (2012) 069 DTR 0086INCOME TAX ACT, 1961
--Business deduction under section 36(1)(vii)--Bad debtsWriting of debts--Assessee claimed deduction of Rs. 3,69,550 towards bad debt written off. Though AO allowed the claim, CIT noticed that the bad debt did not represent debts which had become irrecoverable or written off as bad debt in the accounts for the previous year relevant for the assessment year. Accordingly, he declared the assessment as prejudicial to the interest of the revenue and directed revision of the same. Assessee contended that writing off of bad debt in the profit and loss account was not a mandatory requirement for claiming deduction of bad debt. Held: Unless bad debt was written off by debiting the Profit and Loss Account which necessarily means that the debtors' account should be credited or so much of the amount debited in the Profit and Loss Account should be written off from the amount due from the debtors, the writing off as contemplated under section 36(1)(vii) was not satisfied.
Income Tax Act, 1961 Section 36(1)(vii)
IN THE KERALA HIGH COURT
C.N. RAMACHANDRAN NAIR & K. VINOD CHANDRAN, JJ.
Sampanna Kuries (P.) Ltd. v. Dy. CIT
ITA No. 38 of 2003
20 December, 2011
Appellant by : K.B. Muhamed Kutty and K.M. Firoz
SUBSCRIBE FOR FULL CONTENT |