TaxTMI 
TaxTMI 
2024 (11) TMI 642
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....1,11,42,400/-. Thereafter, the case was selected for scrutiny and in the scrutiny assessment, the AO had disallowed the claim made for provision for bad and doubtful debts and provision for doubtful advances aggregating Rs. 94 Lakhs on the ground that the debtor's accounts are not closed and the debts are not written off as irrecoverable. The AO also disallowed the additional depreciation claimed by the assessee for the reason that the assessee had used the assets for less than 180 days and hence restricted the additional depreciation to 10%. The assessee challenged the said order before the Ld.CIT(A). The Ld.CIT(A) had accepted the claim of the additional depreciation whereas confirmed the disallowance of provision of bad and doubtful debt....
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.... that the advances written off were in the nature of trade advances in connection with the business of the appellant and are revenue in nature and hence were eligible to be claimed as revenue business expense. b) The Ld. CIT(A) ought to have noted that the appellant had debited the "Provision for doubtful advances" to the Profit & Loss Account of the year and simultaneously reduced the said amount from the amount of Loans and Advances in the Balance Sheet. The provision for doubtful advances is not a general provision created by the appellant but is an actual write off of specifically identified trade advances. Accordingly, the said provisions are in the nature of write off of doubtful advances eligible for deduction while computing the t....
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.... in the statement as against the provision for doubtful advances and the net effect would be zero. The assessee had written off the said amounts of Rs 94,00,066 in the profit and loss account in respect of the bad and doubtful debts and advances and also reduced the said amount of provision from the amount of trade receivables on the asset side of the balance sheet. We have also perused the invoice wise details and the balance in the ledger folios in respect of the 3 assessee's which comes about Rs. 29,00,066/. The assessee in their respective ledger folios had written off the outstanding balances by stating that being debtors accounts set off against provision. Therefore, as per the documents submitted by the assessee, it is very clear tha....