2019 (2) TMI 367 - AT - Income Tax

Disallowance of bad debt claimed - Held that - There is no dispute with regard to the fact that the assessee has written off the debt and it is also not in dispute that proceedings against the NSEL is pending before the courts. Therefore, following the ratio laid down by the Hon ble Supreme Court in the case of M/s. TRF Limited Vs. CIT (2010 (2) TMI 211 - SUPREME COURT), we direct the A.O. to allow the claim of bad debt. - Decided in favour of assessee Disallowing the deduction u/s 80C in respect of PPF contribution - Held that - No argument is made by the Ld. Counsel for the assessee and he has not pointed out as what was the claim before the authorities below, therefore, in the absence of the same, this ground of the assessee s appeal is rejected.

Summary

Issues involved:
1. Disallowance of bad debts amounting to ?1,63,43,622.
2. Non-allowance of deduction under section 80C for PPF contribution.
3. Appeal against the order of the CIT(A) being incorrect and perverse.
4. Request for interim relief for total stay of demand recovery.

Issue 1: Disallowance of bad debts
The assessee's appeal was directed against the order of the CIT(A) confirming the disallowance of bad debts of ?1,63,43,622 for the assessment year 2014-15. The Assessing Officer disallowed the claim stating it was premature. The assessee argued that the bad debts were a result of a fraud by National Spot Exchange Limited (NSEL) and were written off accordingly. The assessee cited legal precedents and circulars supporting their claim. The Hon'ble Supreme Court's decision in M/s. TRF Limited Vs. CIT was referred to, emphasizing that after April 1, 1989, it is not necessary to establish irrecoverability, but enough if the bad debt is written off. The Tribunal directed the Assessing Officer to allow the claim of bad debt as the debt was written off, and legal proceedings against NSEL were ongoing.

Issue 2: Non-allowance of deduction under section 80C
The second ground of appeal was related to the non-allowance of deduction under section 80C for PPF contribution. The assessee did not provide arguments or details regarding this claim, and as a result, this ground of appeal was rejected due to lack of substantiation.

Issue 3: Appeal against incorrect and perverse order
The third ground of appeal was of a general nature and did not require separate adjudication, as it was not specific to any particular issue or argument. The Tribunal did not provide further details on this ground.

Conclusion
The Tribunal partly allowed the appeal filed by the assessee, directing the Assessing Officer to allow the claim of bad debt. The order was pronounced on 05.02.2019. The judgment addressed the issues of bad debt disallowance and the non-allowance of deduction under section 80C, providing detailed analysis and legal references to support its decision.