TaxTMI 
TaxTMI 
2015 (6) TMI 934
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....ated 30.9.2013 passed in Tax Appeal No.208 of 2010 quashed and set aside the order of the Tribunal, and remanded the matter back to its file to decide the same on merits and issue arising in the appeal. 3. The sole ground of appeal taken by the Revenue reads as under: "1. The ld.CIT(A) has erred in law and on facts while deleting the disallowance of Rs. 34,64,718/- on account of bad debts." 4. Brief facts of the case are that the AO observed that the assessee has claimed bad debts of Rs. 34,64,718/-. He required the assessee to file account copy of each party with details of debits and credits, steps taken for recovery with proof, complete name and postal address and also PAN of each party. The assessee vide its letter dated 25.8.2004 su....
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....f the Tribunal reported in 56 ITD 307 (Bench- B) wherein it was clarified that even as per amended provision of section 36(1)(vii) of the Act w.e.f. 1.4.1989 the assessee has to establish that the debts were bad debts. He also relied on the decision of Madras Bench of the Tribunal in the case of Bhawarlal C. Bafna Vs. ACIT, (2004) 25 SITC 440 (Mad). He also observed that the Ahmedabad Bench of the Tribunal had also followed the decision and held that writing off is to be of a bad debt and not of any debt which is not bad, and therefore, he disallowed deduction of Rs. 34,64,718/-. 6. On appeal, the CIT(A) allowed the claim of the assessee. The CIT(A) observed that the assessee-company had written off the liabilities to extent of Rs. 36,91,0....
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....atter to the AO to examine solely to the extent of written off, whether the debt or part thereof was written off in the accounts of the assessee. 8. We have heard rival submissions and perused the orders of the lower authorities and material available on record. The undisputed facts of the case are that the assessee has disclosed write off of liabilities no longer required of Rs. 36,91,095/- and offered the same as income. Simultaneously, the assessee claimed write off of bad debts of Rs. 34,64,718/- and claimed the same as deduction from the income. The AO though taxed the liability no longer required written off as income of the assessee, but did not allow deduction for bad debts claimed by the assessee on the ground that the assessee fa....