2026 (6) TMI 297

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....irm and engaged in the business of manufacturing engineering products and filed their return of income on 01/10/2013. The return was selected for scrutiny under CASS and notice u/s. 143(2) was issued on 04/09/2014. Thereafter notice u/s. 142(1) was issued. The assessee appeared and furnished the details called for by the AO. The AO based on the details furnished by the assessee, had treated the unsecured loans as income u/s. 68 of the Act. Similarly, the bad debts as well as the difference in the loss of the exchange has been disallowed by the AO. The PF and ESI claim was also denied since the payment was made beyond the due date prescribed under the said Acts. Another disallowance u/s. 40(a)(ia) of the Act for the non-deduction of TDS was ....

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....ribunal. Therefore we are condoning the said delay and proceeded to decide the appeal on merits. 6. At the time of hearing, the Ld.AR submitted that the bad debts were written off in the books of assessee and therefore it is an eligible one for claiming deduction. Similarly, the assessee had incurred the various expenses but unfortunately the authorities had confirmed a portion of the said expenses as not allowable which is not correct. The Ld.AR also filed a paper book enclosing the supporting documents in respect of the bad debts as well as the expenses incurred by the assessee. The Ld.AR also submitted that the various documents enclosed in the paper book were already filed before the AO as well as before the Ld.CIT(A) but they have n....

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....tten off the dues from the said parties. The amended section 36(1)(vii) also does not insist for any proof from the borrower and it is enough if the assessee had written off the said dues in their books of accounts. Previously, the section mandates that the assessee should establishes the fact that the debt becomes a bad debt which was now amended and therefore the assessee is entitled for deduction if the books of accounts shows the debt has been written off. 11. Further, the above said view was fortified by the judgment of the Hon'ble Supreme Court reported in (2010) 323 ITR 397 in the case of T.R.F. Ltd. vs. CIT wherein it was held that to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish t....