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TMI Blog2012 (8) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... ten off has to be seen only by the Assessing Authority by looking into the accounts of the assessee - issue is remanded back to the files of the Assessing Officer for passing a fresh order of assessment - Tax Case (Appeal) Nos.1379 and 1380 of 2012 - - - Dated:- 24-7-2012 - MRS.JUSTICE CHITRA VENKATARAMAN, MR.JUSTICE K.RAVICHANDRABAABU, JJ. For appellant : Mr.R.Venkatanarayanan For respondent : Mr.N.V.Balaji Standing Counsel for Income Tax JUDGMENT CHITRA VENKATARAMAN, J. The following is the substantial question of law raised by the assessee as against the order of the Income Tax Appellate Tribunal in respect of the assessment years 1993-94 and 1994-95: " Whether on the facts and in the circumstances, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stored the order of the Assessing Officer. Aggrieved by this, the present appeal has been filed by the assessee. 4. Learned counsel appearing for the assessee pointed out that when the debts had become irrecoverable, they had identified the same and claimed it as a deduction in the profit and loss account and hence, the claim of the assessee is covered by the decision of the Gujarat High Court reported in [1981] 130 ITR 95 (Guj) (Vithal Dass H. Dhanjibhai Bardanwala Vs. CIT) as well as that of this Court reported in [2001] 248 ITR 670 (Commissioner of Income Tax Vs. Crescent Films (P) Ltd.). In support of his claim, learned counsel appearing for the assessee placed before us the balance sheet as on 31.3.1993 and 31.3.1995. We do not thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus out of the provision for doubtful debts of Rs.79,73,725/- (Rs.43,51,034/- + Rs.36,22,691/-), the provision made as on 31.3.1993 was only to the tune of Rs.57,93,447/-, which means, the assets side of the balance sheet went down only to an extent of Rs.21,80,278/-. Thus this sum alone being written off in the books of accounts for bad and doubtful debts, qualified for deduction. 7. Referring to the decision of the Apex Court reported in [2010] 323 ITR 166 (Vijaya Bank Vs. Commissioner of Income Tax), learned Standing Counsel pointed out that the law declared by the Apex Court was, when whatever had been debited to the profit and loss account goes for a corresponding or simultaneous reduction from loans and advances/debts on the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that there was an actual reduction by the assessee in its books that the benefit of deduction under Section 36(1)(vii) would be available to the assessee. Thus the Apex Court held that mere reduction of profits or debiting the amount to the profit and loss account, per se, would not constitute actual write off. 11. Applying the said decision to the facts herein, as already noted, as far as assessment year 1993-94 is concerned, under Schedule 4, the assessee claimed provision of doubtful debts to the extent of Rs.36,22,691/-. The opening provision existed in the accounts at Rs.43,51,034/-. 12. As rightly pointed out by the learned Standing Counsel appearing for the Revenue, the provision for bad debts thus available in the balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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