2026 (2) TMI 1134

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....Act"] arising out of the assessment order dated 29.12.2018 passed u/s 143(3) of the Act pertaining to Assessment Year 2016- 17. 2. Brief facts of the case are that assessee company filed its return of income, declaring income of INR 7,74,50,890/- on 30.09.2016. The return was processed u/s 143(1) of the Act and case was selected for scrutiny under CASS (Complete Scrutiny). Notice u/s 143(2) of the Act was issued on 08.08.2017 followed by notices u/s 142(1) alongwith questionnaire. In response, assessee filed part information and details from time to time. Thereafter, the AO assessed the income of the assessee at INR 13,25,86,670/- vide assessment order dated 29.12.2018 passed u/s 143(3) of the Act. 3. Against the said order, assessee ....

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....itten off the said debts in its books of account during the relevant financial year and had furnished complete party-wise details, thereby satisfying the requirements of section 36(1)(vii) read with section 36(2) of the Income Tax Act, 1961. It is well-settled by the Hon'ble Supreme Court in the case of TRF Ltd. v. CIT [2010] 323 ITR 397 (SC) that after 1.4.1989, it is not necessary for the assessee to establish that the debt has become irrecoverable; it is sufficient if the same is written off in the books. 3. The learned Commissioner of Income Tax (Appeals) has further erred in confirming the ad hoc disallowance of Rs. 30,34,457/- being 30% of the total travelling and conveyance expenses incurred by the appellant. The disallo....

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....ion. 8. Heard the contentions of both parties at length and perused the material available on record. From the perusal of the copy of Balance Sheet submitted before us, it is observed that these figures are taken by the AO from the Balance Sheet where the same were shown as provision in the liability side. Further, from the perusal of Profit & Loss Account available at page 28 of Paper Book and corresponding Schedule-22 of employee's benefits at page 41 and other expenses at page 42 in Note No.24 itself, it is observed that assessee has not claimed any expenditure in respect of gratuity and compensated absences. Since no expenses was claimed on account of these provisions, therefore, no additions could be made. Accordingly, we delete the....

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....the amounts written off was offered for tax or not in any of the preceding Assessment Years. Therefore, in the interest of justice, we remand this issue back to the file of AO and direct to examine whether the assessee has fulfilled all the conditions laid down u/s 36(1)(vii)/36(2) of the Act, claiming the bad debts. The assessee has also directed to file all the necessary documents/evidences in support of bad debts claimed during the year. Accordingly, Ground of appeal No.2 raised by the assessee is allowed for statistical purposes. 12. Ground of appeal No.3 raised by the assessee is with respect to adhoc disallowance of INR 30,34,457/- made @ 30% out of the travelling and convenience expenses. 13. Heard the contentions of both parti....