9911796707
TMI Blog2012 (5) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee as bad debts written off amounting to 5.12 crores u/s 36(1)(vii) of the Act? 2. Whether provisions of Section 36(1) are at all applicable to the present case? 2. The aforesaid appeal relates to the assessment year 2003-04 and arises in the case of Auto Pin India Ltd., the respondent-assessee. 3. The respondent-assessee is engaged in manufacture and sale of automobile parts. For the assessment year in question, the assessee on 21st November, 2003, had filed its return of income declaring a loss of Rs.19,88,20,459/-. By assessment order dated 10th March, 2006, the total income of the assessee was assessed at loss of Rs.7,94,51,570/-. One of the major additions made by the Assessing Officer was disallowance of bad debt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he factum that bad debts written off, relate to trading transactions. The case of the assessee was that the transportation cost and cost of lifting the rejected goods itself was prohibitive. The contention of the assessee was accepted. 5. The appeal preferred by the Revenue has been dismissed by the tribunal. The tribunal went into the factual matrix of the case and observed that full details of bad debt along with the dates on which invoice for sale was raised, copy of bill and copy of accounts for earlier years with efforts made by the assessee for recovery, were filed before the Assessing Officer, but these were ignored. The assessee had given full details of the transactions with the respective parties with copy of ledger account, copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee." 8. A combined reading of the aforesaid two clauses shows that two conditions are stipulated. (i) The amount should be written off as irrecoverable in the accounts of the assessee for the previous year. (ii) The amount, which is sought to be written off, should have been taken into account as income of the assessee in the previous year relevant to the assessment year or in the earlier previous years. 9. The tribunal has noticed that the assessee had made sales of Rs.231.57 crores to the parties in the seven previous years. In some cases, sale proceeds were not received on the ground that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iting off of bad debts would result in increase in the loss figure. There is no evidence or material on record to show that the there was deliberate attempt by the assessee to delay writing off the bad debts in the earlier assessment years, which has resulted in understatement of income or short recovery of tax. The Assessing Officer on the contrary had recorded that the assesee was unable to establish/show the efforts made to recover the amounts. We do not have before us and the Assessing Officer has not referred to the income returned by the assessee in the earlier assessment years or in the subsequent years. In a given case, if we have full facts and necessary details, we may examine the aforesaid contention, but in absence of factual de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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