TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 2312
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.... Act, 1961 (hereinafter 'the Act'). 2. The first issue in this appeal of Revenue is against the order of CIT(A) allowing Attimari Coolie Expenses of Rs. 21,35,504/- out of the total expenses claimed by assessee at Rs. 28,47,339/-. For this Revenue has raised the following ground No. 1: - "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing Rs. 21,35,504/- out of Rs. 28,47,339/- of Attimari Coolie Expenses claimed to have incurred by the assesse. Since the said expenditure have not been incurred under any statutory, judicial, commercial or administrative obligation and therefore not permissible as deduction, the same is required to be disallowed in full."" 3. Briefly stated facts are that....
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....labourers or contractors etc. The following pertinent observations are culled out from them: 1) The claimed bills from the workers' unions have neither address nor phone number on them. Therefore, they are not verifiable. 2) All payments are shown in cash, even one of them is not by cheque. Now going by the judgment of Hon'ble Gujarat High Court in the case of Joshi v CIT (209 ITR 324) wherein the High Court has observed that observed that in order to be entitled to deduction of payments made to persons whose names are not disclosed, the assessee has to: a) Establish the practice prevailing in That line of business for making such payments: b) To adduce satisfactory evidence to establish The payments: and C) To satisfy t....
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....not accepted and it is held that rule 6DD (k) is not applicable in the case of appellant. 7.5 Moreover, considering the fact that the entire expenditure has been made in cash, the genuineness of expenditure cannot be verified. However, except the above mentioned payment of Rs. 1,16,433/- remaining did not exceed Rs. 20,000/-. Therefore, considering the nature of payment, AO's argument, and the appellant's submission, it is considered reasonable and fair, if the disallowance made is restricted to 25% of the addition made. Consequently, the addition made of Rs. 4,73,245/- is reduced to Rs. 1,18,311/-. No separate addition is being made under section 40A(3) of the Act as the addition has been sustained under section 37(1) of the IT Act." 6.....
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....the reasons for write off: - 10. The AO require the assessee to explain and furnish the details in whose name the sundry balances have been written off with reason thereof. The assessee filed details of debt not recoverable. It was also claimed by the assessee that these debts have already been declared as income in earlier years. The assessee also explained that the invoices were offered as incomes when the same were raised. However, subsequent when the Directors formed the opinion that the amounts had become irrecoverable the same was written off as bad debts in assessee company's books of accounts. Further, Ld counsel explained that it is the normal practice in this line of business, that a specified percentage of the running bill i....
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....(supra) has allowed the claim of the appellant of bad debts. I agree that if the write off is not mala fide; only two conditions are required to be satisfied by an assessee to claim bad debt as per provisions of section 36(1) (vii) of the Act. Firstly, the amount should be written off as irrecoverable in the accounts of the assessee for the previous year and secondly, the amount which is sought to be written off should have been taken into account as income of the assessee in the previous year relevant to the assessment year or in the earlier previous years. In the case of the appellant, while explaining each and every debt, it has shown that the debts have been written off in its books of account during the year and were shown as income ....
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....nts of the assessee, that is enough for claiming deduction as bad debt. Hon'ble Supreme Court has held in Para 3 and 4 as under:- "3. For the sake of clarity, we re-produce herein below provisions of Section 36(1)(vii) of the Act, both prior to 1st April, 1989 and post-1st April, 1989. "Pre-1st April, 1989: Other deductions. 36.(1) 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-- (i) to (vi) xxxx xxxx xxxx (vii) subject to the provisions of sub-section (2), the amount of any debt, or part thereof, which is established to have become a bad debt in the previous year. Post-1st April, 1989: Other deductions. 3....