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2021 (8) TMI 992 - AT - Income TaxDisallowance of Bad debts on account of TDS - amount which credited was not given to the assessee u/s. 199 of the Act, though relevant income was taxed in the hands of assessee - HELD THAT - In the present case, the assessee has not furnished the details of TDS from deductor by furnishing valid TDS certificates. It is incumbent upon the assessee to show that the amount has actually been deducted by the deductor towards TDS due from the assessee. Once the assessee establishes that it has been actually deducted from the deductor, the corresponding write off by the assessee on non-recovery of TDS credit is to be allowed. With these observations, we remit this issue to the file of Assessing Officer for fresh consideration. Accordingly, the main ground and additional ground raised by the assessee on this issue is disposed of. Allowability towards service tax which was written off as bad debt u/s. 36(1)(vii) - contention of the ld. AR is that the claim of bad debt was allowable to the assessee if the same has been written off as irrecoverable by the assessee and it was not necessary to establish that the debt has actually become bad - HELD THAT - In this case, the consideration paid as service tax was to be claimed as receivable from DIP. In the assessment year under consideration, the assessee came to know that it is not recoverable and has written off as bad debts in the books of account. The only contention of the ld. DR is that since it has not routed through Profit Loss account, it cannot be allowed as bad debt - argument of the ld. DR is not tenable and cannot be accepted on the reason that service tax is shown as receivable from the DIP which was not received on the fact that DIP is not paying service tax in view of the guidelines of the DAVP of the Central Govt. and it is also not paying service tax to any other advertising agencies. However, the assessee has already paid this amount to the Government. Since service tax payment recovery is denied by the DIP, the assessee has written off it as bad debt. Therefore, we are of the view that the assessee is justified in claiming it as bad debt by writing off in the Profit Loss account. Accordingly we allow the claim of the assessee - Decided in favour of assessee.
Issues:
1. Disallowance of additions and disallowances made by the Respondent Officer. 2. Disallowance of Bad Debts Written Off under section 36(1)(vii) of the Act. 3. Disallowance of unrealized TDS made by the Appellant's Customers. 4. Disallowance of interest levied under section 234B of the Income Tax Act. Analysis: Issue 1: Disallowance of additions and disallowances made by the Respondent Officer The appeal challenged the order of the CIT(Appeals) upholding additions and disallowances made by the Respondent Officer. The Tax effect related to each ground of appeal was specified. The Tribunal admitted additional grounds raised by the assessee under Rule 11 of the Income-tax (Appellate) Tribunal Rules, 1963. The Tribunal relied on the judgment of the Supreme Court in National Thermal Power Company Ltd. v. CIT and admitted the additional grounds for adjudication. Issue 2: Disallowance of Bad Debts Written Off under section 36(1)(vii) of the Act The first issue concerned bad debts related to TDS amounts for previous assessment years. The assessee claimed these amounts as bad debts under section 36(1)(vii) of the Act. The Tribunal noted that the assessee did not furnish TDS certificates for the claimed amount. A similar issue was considered by the Kolkata Bench of the Tribunal, where the allowability of TDS recoverable written off was upheld. However, in the present case, the Tribunal remitted the issue to the Assessing Officer for fresh consideration due to lack of TDS details. Issue 3: Disallowance of unrealized TDS made by the Appellant's Customers Regarding the disallowance of unrealized TDS made by the Appellant's Customers, the Tribunal emphasized the need for the assessee to establish that the TDS was actually deducted by the deductor. Since the assessee failed to provide valid TDS certificates, the Tribunal remitted the issue to the Assessing Officer for fresh consideration. Issue 4: Disallowance of interest levied under section 234B of the Income Tax Act The final issue pertained to the disallowance of interest levied under section 234B of the Income Tax Act. The Tribunal found that the interest was upheld by the Appellate Commissioner. However, no specific details of the reasoning behind this decision were provided in the summary. In conclusion, the Tribunal partly allowed the appeal for statistical purposes, addressing various issues related to disallowances and additions made by the Respondent Officer, bad debts written off, unrealized TDS, and interest levied under section 234B of the Income Tax Act. The Tribunal provided detailed analysis and considerations for each issue, remitting some matters back to the Assessing Officer for fresh consideration.
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