2023 (5) TMI 702

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....after referred to as "the Act" for short] for the Assessment Year (AY) 2007-08. 2. The appeal is arising out of the order recalled by the ITAT in the miscellaneous application No. 24/AHD/2023 for the purpose of the adjudication of ground No. 3 only which is reproduced as under: "3. The learned CIT(A) has erred in disallowing the amount of bad debts written off of Rs.69,33,446/- by holding that the appellant had not written off the same in its books of accounts. It is submitted that it be so held now and the deduction as claimed be allowed. 3.1 It is submitted that such amounts are already written off against the amount of debtors and hence the same falls in the ratio of Supreme Court decision in case of T.R.F. Limited vs. CIT (2010) 32....

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....t Rs.1,06,00,000/-. It is noticed that appellant has claimed a sum of Rs.36,75,000/- as bad debt written off in the profit and loss account and balance amount of Rs.69,33,446/- was claimed in the computation of income. The amount of bad debt was disallowed by the Assessing Officer since the assessee has failed to establish that the debt has actually become bad or not. However, now the issue has been finally settled by the decision of Hon'ble Supreme Court in the case of T.R.F. Ltd. Vs. CIT (2010) 323 ITR 397 wherein it has been held that for claiming bad debt, it is enough if bad debt is written off as irrecoverable in the account of assessee. Undisputedly, the assessee has actually written off bad debt to the extent of Rs.36,75,000/- only ....

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....earned DR vehemently supported the order of the authorities below. 9. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the AO has made the disallowance of the deduction claimed by the assessee for Rs.1.06 crores for the bad debts on the ground that the assessee has not put any effort into the recovery of such bad debts. However, the learned CIT(A) was not satisfied with the reasoning given by the AO for the purpose of the disallowance. As such, the learned CIT(A) observed that it was not necessary for the assessee to put any efforts into the recovery of bad debts for claiming the deduction. As such, writing off the bad debts in the books of ac....