2015 (7) TMI 7

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....ee has preferred this appeal against the order passed by the Tribunal which has declined to allow deduction of Rs. 2,85,75,000/- as bad debt. 2. The assessee company is engaged in the manufacture and sale of automative batteries. The assessee claimed a sum of Rs. 2,85,75,000/- as warranty claim being written off. The claim of the assessee was that it has voluntarily recognized and credited the wa....

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....of law: "(a) Whether in law, the Tribunal was right in holding that the expenditure towards warranty claim written off during the relevant year which was suffered tax in preceding year was neither allowable under Section 37 nor under Section 36(1)(vii) of the Act? (b) Whether the Tribunal was right in holding that the provisions of Section 36(1)(vii) read with Section 36(2) were not applicable w....

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.... to treat it as a bad debt and write off the said claim. Accordingly, they sought for deduction of the said amount out of the total income. Once the assessee writes off a claim in its books of account treating it as a bad debt under section 36(1)(vii) read with 36(2), the assessee is entitled for deduction of the said amount. However the authorities have proceeded altogether in a different course.....