2010 (9) TMI 1263

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....he amount claimed as a bad debt is actually the TDS that is deducted from interest income of appellant. According to assessing Officer, the moment TDS is deducted by the payer, the amount of TDS so deducted becomes property of the Government that cannot be held as bad debts and be allowed as bad debts. 3. In the appellate proceedings learned counsel of appellant has admitted that the amount was treated by appellant as TDS, He has argued that appellant came to know subsequently that this TDS was never deposited by the deductor party into Government Account and not paid to the assessee also. Therefore, appellant reversed the entries and treated the TDS so deducted as a debt due from the deductor party which has now been written off and clai....

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....s property of the Government. Therefore, writing off of those TDS amounts as bad debts is not at all justified. This ground of appeal is accordingly rejected." 5. Aggrieved the Assessee is on appeal. The fact is that the Assessee had offered the entire amount of interest receivable from the debtors, including the amount withheld by the debtor towards TDS, as income of the earlier years. Out of this amount the Assessee has not received the amount of ₹ 1,86,316/- withheld by the debtors. Thus this amount certainly represents a debt due from the debtor which has not been realised. No doubt if the debtor had deposited the amount into the Government on behalf of the Assessee, it would amount to payment of this amount to the Assessee, as ....