2018 (1) TMI 1308

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....014, by proposing the following question, stated to be a substantial question of law: "Whether in the circumstances of the case and in law, the Appellate Tribunal was right in deleting the disallowance of Bad Debts of Rs. 70 lacs despite the fact that out of the Bad Debts claim of Rs. 81.49 lacs, only Rs. 11.49 lacs was outstanding and hence provision of section 36(1)(vii) r.w.s. 36(2) were no satisfied for the balance amount of Rs. 70 lacs?" 2. The assessment year is 2010-11. The Assessing Officer while assessing the total income observed that the assessee had claim Rs. 81,49,803/towards bad debts. He disallowed the claim of bad debts of Rs. 70,00,000/on the ground that the condition laid down under section 36(2) of the Act has....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....se of gold and silver and had regular business transactions with M/s. Maharishi Traders, Surat. The assessee used to place orders for purchase of gold on behalf of M/s. Maharishi Traders and subsequently sell the same as per the request of M/s.Maharishi Traders and generally accounts were squared off for that particular trade. The assessee used to get margin of 10% for this arrangement. A dispute arose between the parties during assessment years 2003-04 and 200405. As on 31.03.2004 there was an outstanding balance of Rs. 84,19,223/receivable by the assessee from M/s. Maharishi Traders towards the sales made on its behalf. The aforesaid outstanding amount was duly reflected in the books of account of the assessee. 7. It appears that the r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....had been paid during the course of business in order to settle the dispute, it did not find any reason to interfere with the findings of the Commissioner (Appeals) that Rs. 70,00,000/was required to be treated as a business loss. 8. From the facts narrated hereinabove, it is apparent that the assessee had initially received an amount of Rs. 70,00,000/from M/s. Maharishi Traders, which was duly reflected in the books of account. Subsequently, in view of the verdict of the court the assessee was required to pay an amount of Rs. 70,00,000/to M/s. Maharishi Traders. Thus, the assessee was required to pay such amount to M/s. Maharishi Traders in relation to a business dispute. The assessee had regular transactions with the said party. Moreove....