TaxTMI 
TaxTMI 
2016 (2) TMI 734
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....Rs. 6,52,13,606/- made by the AO on account of bad debt." 2. Apropos sole ground of the revenue, we have heard arguments of both sides and carefully perused the relevant material placed on record before us, inter alia, assessment order, impugned order of the CIT(A) and other documents placed on record before us. The ld. Departmental Representative (DR) supporting action of the AO drawn our attention towards relevant paragraph 2 to 2.5 and submitted that the assessee could not prove that the amounts written of was offered as income in earlier financial year. Therefore it was clear that in order to claim a deduction on account of bad debts, it was to be established that the debt had become bad and at the same time it should also be written o....
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....d in respect of sales made in the previous year as well as in the current year. The Ld. AR, further pointed out that in order to prove genuineness of the bad debts, the assessee company filed the copies of the EMails exchanged between it and its debtors from which it is abundantly clear that the appellant company did not receive the payments from its debtors due to well founded reasons. The Ld. AR vehemently contended that the assessing officer made contradictory observations while making the addition and the legal position on this issue is very clear that write off of bad debts is allowable in the year in which the assessee has written off the debts as above. The ld. AR also reiterated its written submissions dated 10.6.2010 placed before ....
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....d the party-wise details of the amount written off alongwith reasons for the same and also submitted the correspondence with the various parties to prove the genuineness of the bad debts. She also stated that as the assessee is separately claiming rebate and discount amounting to Rs. 46,95,289/- and misc. other expenses amounting to Rs. 3,80,80,437/- and as the nature of the expenses is same, its claim for bad debts is not justified. During the course of the appellant proceedings, it has been stated that the appellant filed complete details of rebate and discount and misc. expenses and the perusal of the same showed that the expenses claimed under those heads are totally different and relate to the assessment year in question. The AO ....
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....part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year : Prior to 1-4-1989, the above position reads as follows :- "Subject to the provisions of sub-section (2), the amount of any debt, or part thereof, which is established to have become a bad debt in the previous year." The appellant has argued that there is significance difference between the provisions as it stood prior to 01.04.1989, and the provisions stands today. Prior to 01.04.1989, it was necessary for the assessee to establish that the debt had become bad, whereas now for the debt to be classified as bad, the assessee has only to write it off as irrecoverable in its accounts. The appellant relied on the position of law as it....
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....ate and discount and miscellaneous expenses which showed that the expenses claim under those heads are totally different and pertaining to the assessment year under consideration in this appeal i.e. 2004-05. These fact has not been controverted by the ld. DR during the arguments before us. The Ld. CIT(A) also noted that the AO also observe that the assessee company has also filed the copies of the email exchange between it and its debtors alongwith details showing the amount of that which the assessee was not able to recover from the respective debtors and the assessee also filed invoices / date-wise details of the invoices to prove that this amount was offered as income in the earlier financial year relevant to the bad debts showed to be c....
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....s with the requirement of the assessee to prove that the debts has become a bad debt. In the present case, the assessee submitted party-wise detail, copies of the invoices/ bills raised against the debtors and other relevant documentary evidence to prove that the amounts was incorporated as revenue receipts and offered as income in the earlier financial year. The assessee also submitted copies of the e-mails and other correspondence with the debtors showing that the conscious and sincere efforts made by the assessee company towards recovery of impugned amounts and the assessee also submitted relevant copies of the ledger accounts and other evidence to show that the claimed debts has become bad and the same was properly submitted before the ....