2007 (3) TMI 219

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....ome-tax Appellate Tribunal, Delhi Bench "F" in I.T.A. No. 3994/Del/1997 relevant for the assessment year 1994-95. The assessee had written off some amount that was due to it as irrecoverable in its books of account. This was in the financial year 1993-94. The Assessing Officer was of the view that these debts were shown as good debts till March 31, 1993, and the assessee was not able to prod....

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.... Section 36(1)(vii), as it stands with effect from April 1, 1989, reads as follows: "36. Other deductions.- (l) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28-... (vii) subject to the provisions of sub-section (2), the amount of any bad debt or part thereof which is writte....

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....earing No. 551, dated January 23, 1990, wherein it is stated in paragraphs 6.6 and 6.7 that the earlier provision generated a considerable amount of litigation on the issue whether the assessee had been able to establish that the debt had become bad. It was to overcome this that the amendment was made resulting in a bad debt "now being straightaway allowed in the year of write off". The interpr....

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....off a debt as a bad debt without giving any reason, he will not get any benefit from this. This is for the reason that by virtue of section 41(4) of the Act, where a deduction has been allowed in respect of a bad debt which is irrecoverable and if the amount or a part thereof is subsequently recovered, then that amount shall be deemed to be profits and gains of business or profession of that relev....