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2016 (5) TMI 239 - ITAT DELHIDisallowance of bad debts - Held that:- Section 36(1)(vii) was amended w.e.f. 1.4.1989 and as per the amended provision of clause (vii) of section 36(1) of the Act, subject to the provisions of sub-section (2) of section 36, the amount of any bad debts or part thereof which is written off as bad debts as irrecoverable in the accounts of the assessee, the provisions shall be allowed. Hence, the basis of disallowance adopted by the AO is perverse and misconceived and against the letters and spirit of relevant provisions of section 36(1)(vii) of the Act which is not sustainable and the same was rightly dismissed by the ld. CIT(A). In the light of the proposition laid down in the case of TRF Limited [2010 (2) TMI 211 - SUPREME COURT ], the claim of the assessee pertaining to bad debts, the ld. CIT(A) was correct in granting relief to the assessee as the assessee had written off the claimed amount in bad debts in its books of account during the previous year and there was no requirement to establish this fact that the debts have become bad debts in the previous year after 1.4.1989 there was no requirement to show and efforts of recovery and to establish that the debts have become debts despite of sincere and all possible efforts of the assessee. - Decided in favour of assessee
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