https://www.taxtmi.com/caselaws?id=769293 ITAT Mumbai allowed the taxpayer's appeal regarding bad debts claimed under section 36(1)(vii). The AO rejected the bad debt claim, alleging it was a sham transaction to offset long-term capital gains, citing relationships between directors and timing of assignment agreements. The ITAT held that the AO's conclusions were based on presumptions without proper inquiry. Since the taxpayer fulfilled statutory requirements under sections 36(1)(vii) and 36(2) by writing off debts in books, no further proof of actual bad debt was required. The disallowance was deleted. en-us Thu, 13 Mar 2025 00:00:00 +0530 Wed, 23 Apr 2025 09:09:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=769293 ITAT Mumbai allowed the taxpayer's appeal regarding bad debts claimed under section 36(1)(vii). The AO rejected the bad debt claim, alleging it was a sham transaction to offset long-term capital gains, citing relationships between directors and timing of assignment agreements. The ITAT held that the AO's conclusions were based on presumptions without proper inquiry. Since the taxpayer fulfilled statutory requirements under sections 36(1)(vii) and 36(2) by writing off debts in books, no further proof of actual bad debt was required. The disallowance was deleted. Case-Laws Income Tax Thu, 13 Mar 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=769293