TaxTMI 
TaxTMI 
2016 (9) TMI 591
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.... in this appeal is as to whether the ld CITA is justified in allowing the claim of bad debts and advances written off in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is an Indian Public Limited Company listed on stock exchange engaged in the business of manufacture and supply of Industrial Gases. It was submitted that the assessee is the only company in India which is manufacturing and supplying fuel in the form of Liquid Hydrogen to Indian Space Research Organisation (ISRO) at Mahendragiri. It is a sensitive national importance project and Liquid Hydrogen is used as a fuel in the space crafts / satellites which ISRO sends in the space. The assessee in its usual course of business made adva....
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....was incomplete. Further, since the debt was time barred, assessee had no option but to write off the same. But out of Rs. 1,54,09,751.55 only Rs. 10,14,051.51 was not recoverable. Pennzol Investment & Trading Co. Pvt. Ltd. : Rs. 16,90,920.44 The assessee company bought Industrial Gases from Pennzol Investment & Trading Company Private Limited and marketed the same in Hyderabad. Such sale was shown as income in the relevant year's profit & Loss Account. During the course of business, assessee had to give to the said Company an advance in the current account/running account for buying industrial gases. The said advance was liable to be refunded/adjusted by Pennzol Investment & Trading Company Private Limited from the bills. The balance adv....
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....f Deepak Jhunjhunwala accounts and in the case of C. K. Tibrewala & Co. the principal amount is Rs. 10,00,000/- and the interest is Rs. 15,493/- written off as bad debts. Earnest Money - Rs. 6874.28 The amount was required to be paid as Earnest Money against a Tender for securing company's business, but the tender ultimately was not finalized in favour of the company. The assessee wrote off the aforesaid amounts as bad advances written off in its books as irrecoverable and claimed the same as deduction which was disallowed by the ld AO. The ld CITA appreciated the contentions of the assessee and deleted the disallowance. Aggrieved, the revenue is in appeal before us on the following grounds :- "1. On the facts and circumstances of the c....
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....ecessary efforts for recovery of the dues and after taking cognizance of the fact that those two share brokers had literally become bankrupt due to huge share market scam that happened in the year 2000 / 2001 which is popularly known as 'ketan parekh scam'. With regard to loan dues recoverable from M/s Deepak Jhunjhunwala , the assessee had even sold the securities in the form of shares and sale proceeds thereon amounting to Rs. 23,60,220/- was appropriated towards the loan account. Hence the only security available with that party was sold and appropriated towards the loan account. Parallely the assessee had preferred a civil suit against those two parties which are still pending in the courts. The assessee had taken a conscious decision t....
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....rd including the copy of assessment order u/s 143(3) for Asst Year 2001-02 , copies of various board minutes submitted by the assessee for advancing monies to M/s Deepak Jhunjhunwala and M/s C.K.Tibrewala & Co. and the ledger copies of all the parties whose accounts are written off . The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. We find that the assessee had taken sufficient steps for recovery of the advances given to M/s Deepak Jhunjhunwala and M/s C.K.Tibrewala & Co and all the efforts to recover the dues from the said parties got jeopardized and even the shares that were held as securities were sold and appropriated towards the loan account (in the case of Deepak Jhunjhunwal....