TaxTMI 
TaxTMI 
2025 (6) TMI 1198
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....etails from time to time. 3. During the course of assessment proceedings the Assessing Officer asked the assessee to furnish the details in respect of Sundry creditors. From the details furnished by the assessee, the Assessing Officer noted that the assessee company has not provided PAN and addresses of a number of creditors whose total outstanding is Rs. 4,01,34,549/-. He therefore, specifically asked the assessee to furnish the complete details of sundry creditors along with their PAN, address, details of transactions made along with banking transactions and confirmations up to 16.03.2021. However, the assessee failed to furnish the PAN, address, details of transactions made along with banking transactions and confirmations amounting to Rs. 4,01,34,549/-. Therefore, the Assessing Officer held that the sundry creditors remained unexplained. He further held that the sundry creditors claimed as outstanding liability in the books of the assessee has actually ceased to exist for all practical purposes as there are no more claimants towards the same. He referred to the provisions of section 41(1) of the Act and the decision of Hon'ble Supreme Court in the case of CIT vs. T V Sun....
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....were submitted. However, the assessee did not furnish the nature, reason for write off and documentary evidence. He, therefore, specifically asked the assessee to furnish the complete details of bad debts along with documentary evidence to substantiate the claim of bad debts. The assessee in response to the same furnished the following reply: 1. "Trade receivables Sir in the draft assessment order received from your office, you have made an addition of Rs. 5,87,62,191/- on account of non-submission of documentary evidence for claim of bad debts. Sir, we would like to inform you that in the submission made by us on 29 March 2021, we had provided detailed list of party balances as bad debts. Further in the statement we had made it clear how long the money is outstanding. We have also received notice from Reserve Bank of India for these receivables for having open status as on 10 May 2020. This itself is an evidence that the amount claimed as bad debts is factually bad debts. We request you to kindly consider this claim while concluding the assessment." 6. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee and mad....
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....ilable Added in the preceding Year Since the Appellant has furnished the above before the AO and the addition was made by the AO in respect of the specific entries, the Appellant was supposed to file confirmation from each of the above. If it was contended that these are loans then the evidence in this respect had to be submitted along with confirmed copies of accounts. This has not been done by the Assessee. Simply giving another list of the outstanding sundry creditors is not enough. Accordingly, the addition of Rs. 4,01,34,549/- is restricted to Rs. 2,12,70,466/- In light of these facts, the contention of the Assessee fails and the ground of appeal no. 1 is partly allowed. 8. So far as the disallowance of bad debts is concerned, the Ld. CIT(A) / NFAC restricted such disallowance from Rs. 5,87,62,191/- to Rs. 18,44,764/- by observing as under: "6.2 Findings and Decision:- I have carefully considered the facts of the case as well as submissions filed by the appellant. I find force in the arguments of the Appellant. The section 36(1)(vii) basically stipulates two conditions for allowing the deduction for write-off as bad debt:- ....
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....nd circumstances of the case and in law the Ld. CIT(A) is correct in partially allowing the claim made by the assessee u/s 36(1)(vii) of the Act without appreciating the fact that the assessee had not submitted any supporting documents/evidence which could establish that it had actually fulfilled both conditions governing the grant of deduction in respect of bad debt under clause (vii) of section 36(1), viz (i) the debt should have been taken into account in computing the income of the assessee for the accounting year or for an earlier accounting year (ii) the debt should have been written off from the books of account of the assessee. 3) Whether in the facts and circumstances of the case and in law the Ld. CIT(A) is correct in partially allowing the claim made by the assessee u/s 36(1)(vii) of the Act without bringing on record any fresh evidence or without refuting the reasons given by the AO for making the disallowance? 10. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. The ....