2010 (4) TMI 40

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.... had sold certain pagers to individual customers on instalments. Later on the pager prices crashed and were available at a much lower price in the market. The customers did not make their further payments. It is on this account that the amount payable became outstanding and ultimately turned into bad debts. The assessee had tried legal means also but the said amounts could not be recovered. Consequently, the assessee wrote off the bad debts in its books of accounts and claimed a deduction in respect thereof. 3. The Assessing Officer, however, did not accept the contention of the assessee and made an addition of Rs.81,28,269/-. 4. Being aggrieved by the said assessment order, an appeal was filed by the assessee before the Commissioner ....

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....e Tribunal on the ground that the Commissioner of Income Tax (Appeals) had erred in law as also on facts and circumstances of the case in upholding the addition of Rs.81,28,269/- on account of bad debts and in confirming the addition made by the Assessing Officer. 7. The Tribunal agreed with the assessee and allowed the appeal. The Tribunal took the view that once the assessee had written off the outstanding amounts as irrecoverable in its books of accounts, it was sufficient compliance of the provisions indicated above and, therefore, the Assessing Officer ought not to have disallowed the deduction on account of bad debts written off by the assessee. The Tribunal also noted that after the amendment (w.e.f. 01.04.1989) in the provisions ....