2014 (4) TMI 782

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ble Supreme Court in the case of TRF Limited without appreciating the fact that in one of the cases, the Assessee had written off current year's debit balance as bad debt as can be seen from the annexure enclosed herewith." 2. During the course of assessment proceedings AO noted that the Assessee had written off a sum of Rs.6,27,84,689/- towards bad debts and irrecoverable advances out of which advances written off of Rs.93,52,537/- were deducted from total income and balance amount of Rs.5,34,32,152/- was claimed as bad debts and irrecoverable advances to P/L Account. The AO asked the assessee to furnish the party-wise details of bad debts and irrecoverable advances. The assessee furnished details of bad debts. The AO found that the detai....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he assessee has closed various branches and therefore, it was not possible for the assessee to recover the outstanding receivables from the parties. The assessee took a bonafide decision to write off the amount instead of wasting good money for bad money. The ld. AR has relied upon the decision of Hon'ble Supreme Court in the case of TRF Ltd. and submitted that the assessee has written off bad debts as irrecoverable, then the claim of the assessee cannot be denied. The advances given to the parties are in connection with the assessee's business. He has referred the impugned order of CIT(A) and submitted that CIT(A) has considered the fact that the advances were given in the course of business of the assessee for payment of tax at variou....