2018 (1) TMI 1308

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...., 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 not been satisfied. The Assessing Officer found....

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....ons 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 reason for the dispute that arose between M/s. Maharishi Tr....