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TMI Blog2013 (7) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... revised return, the debts to the tune of Rs.2 crores and odd had been declared as bad - The ground taken by the Assessing Authority and Appellate Authority for not accepting the said bad debts during the assessment year under consideration is contrary to the provisions of Section 36 (1) (vii) - Following decision of Kerala State Industrial Development Corporation Ltd. versus Commissioner of Income-Tax [2012 (9) TMI 805 - SUPREME COURT] - Decided in favour of Assessee. - Income Tax Appeal No.159 of 2008, Income Tax Appeal No.17 of 2009 - - - Dated:- 4-7-2013 - Rajiv Sharma And Arvind Kumar Tripathi (II), JJ. ORDER Heard Mr. D.D. Chopra, learned counsel for the appellant and Mr.Dhruv Mathur, learned Counsel for the respondent. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, are that the assessee U.P. Rajkiya Nirman Nigam Ltd. is a State Government Undertaking engaged in the construction activities. During the year Assessment Year under consideration, i.e. 2004-05 relevant to the F.Y. 2003-04, the assessee had filed its original return declaring therein Rs.6,34,21,360/- on 1.11.2004, but subsequently, the same was revised at Rs.4,32,14,180/- on 18.8.2005 and while revising the said return, it has been declared that the debts to the tune of Rs.2,13,50,967.28, out of Rs.42.07 crores of sundry debtors, had become bad and irrecoverable, as these debts were pertaining to the period 1987-88 and 1998-99. A notice under Section 143 (1) of the Income Tax Act was issued requiring the assessee to explain as to how the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e due date for filing return came, the accounts had not been completely audited and finalized the Books were still subject to audit and open for any correction by the auditors. Hence any decision made before finalization of Accounts can in any manner effect and correct the Accounts and the decision so taken has in all circumstances to be considered as a method and procedure for placing correct income for assessment both as per the statutory provisions of Companies Act, 1956 and I.T. Act, 1961." The Assessing Authority did not agree with the explanation/ justification given by the Assessee and accordingly, add the same on the grounds that these debts were to be written off in the Financial Year 2004-05 relevant to the Assessment Year 2005- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been there in place of 'for'. Further, the words 'accounts of the assessee' are qualified with further words 'for the previous year'. Thus, it only means that the accounts in which the act of writing off is to be done by the assessee should be for the previous year. Therefore, the law requires to write off the bad debt in the accounts of the assessee in the relevant accounting year. There is neither any condition nor any provision that the writing off should be done in the previous year, i.e. before end of the financial year. In the present case, debts relating to the period 1987-88 and 1998-99 claimed in the accounts which were prepared upto 31.3.2004 and as the accounts of the assessee are open and subject to corrections by the Au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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