2015 (11) TMI 626

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....irming the disallowance of bad debts of Rs. 2,20,870 made by the learned Assessing Officer." 2. The brief facts of the case are that the assessee is a commission agent in the field of agricultural goods and received commission from farmers who sold the goods through him. To maintain the clientage and relationship with these farmers, the assessee used to give advances to them. This ensures that the farmers will bring the goods for sale through him. In the relevant year the assessee earned commission income of Rs. 24,52,939 and claimed write off of bad debts amounting to Rs. 2,20,870. According to the Assessing Officer, the assessee did not produce adequate evidence to establish that debt has really become bad. The debts were outstanding s....

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.... both the lower authorities. The assessee as a commission agent has earned commission of more than Rs. 24,00,000 which indicate that his business is voluminous. The advancing of these debts has also not been disputed which is reflected by the finding that they were continuing for the last 3-6 years. The genuineness thereof is not under challenge and there is no doubt that debts have actually become bad. 5. Both the lower authorities have denied the claim on the following observations : (1) The assessee has failed to establish that the debts have actually become bad. (2) The assessee is not a money lender in terms of section 36(2). (3) The claim is not allowable under section 37 also as the assessee could not prove the loss and i....

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....rther, reliance is placed on various judgments, out of which main judgments are as under : (i) T. R. F. Ltd. v. CIT [2010] 323 ITR 397 (SC) ; (ii) Deputy CIT v. Oman International Bank SAOG [2006] 286 ITR (AT) 8 (Mum) [SB] ; (iii) CIT v. Autometers Ltd. [2007] 292 ITR 345 (Delhi) ; (iv) CIT v. Krone Communication Ltd. [2011] 333 ITR 497 (Karn) ; and (v) CIT v. Morgan Securities and Credits P. Ltd. [2007] 292 ITR 339 (Delhi). 8. Apropos the second objection that about applicability of section 36(2), it is trite law that for money lending business section 36(2) is there but for other businesses section 36(1)(vii) will prevail, which is the case of the assessee. On third count, it was pleaded that advancing of loans to farmer....