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TMI Blog2014 (2) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... um of Rs.2,16,17,150/- claimed by the appellant company under the head 'Bad Debts Written Off' on the ground that the aforesaid claim for bad debts remained unsubstantiated. (b) The Hon'ble CIT(A) has confirmed the disallowance out of bad debts on the grounds that bad debts remain unsubstantiated whereas the necessary documents in support of the claim were duly filed during appellate proceedings alongwith application under Rule 46A and the additional evidence was not accepted by the Hon'ble CIT( A) on the grounds that there was no sufficient cause for not filing the additional evidence. The Hon'ble CIT(A) has failed to consider the decision of the Hon'ble Delhi High Court in the case of CIT vs. Virgin Securities and Credits Pvt. Ltd. repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es must have written off the balance of the appellant company in their books in earlier years and therefore there was no account of the appellant company in their books in F.Y 2007-08 which testifies the fact that the debts were irrecoverable and correctly written off by the appellant company. (e) The Hon'ble CIT(A) while confirming the disallowance of the deduction for bad debts written off had concluded that in the case of some parties notices u/s 133(6) were received back unserved and therefore the bad debts remain unsubstantiated. The Hon'ble CIT(A) has failed to appreciate that the transaction with the aforesaid parties is more than 10-12 years old and during such period of time the parties may have closed down their business or shift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the assessee company for the preceding ten years; that similarly, Jindal Steel and Power had also denied any business transaction with the assessee company; that when confronted with these facts, the assessee could not give any convincing reply; that Allmet Alloys India (P) Ltd. and M/s Om Prakash Rakesh Kumar had admitted the transaction with the assessee company and had sent copy of account of the assessee company as per their books, thereby confirming the balance due to the assessee company; that it was surprising that when these parties were admitting their liabilities towards the assessee and they had not denied their obligation to discharge the liabilities, how the assessee, without any reason, proceeded to write off the amounts st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Venkey Steel (P) Ltd. and letters sent to Shri Abid Ali Emran Ali and M/s Haryana Steel were return back unserved. In the case of M/s Om Prakash Rakesh Kumar who vide their reply had stated that they had transactions with the appellant, summons U/S 131 were sent by the AO to examine the nature of the transactions. No compliance was made to the above summons. In view of the above facts, the AO disallowed bad debts claimed by the appellant, since the provisions of section 36(2) were not fulfilled. During the course of appellate proceedings also the appellant has not been able to file any evidences regarding the genuiness of the transactions with the above mentioned parties. As per section 36(2) no deduction on account of bad debts shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with section 36(2) of the I.T. Act, the disallowance made by the A.O on account of bad debts is as per law. This ground of appeal is dismissed." 5. Challenging the impugned order, the ld. Counsel for the assessee has placed reliance on 'TRF Ltd. vs. CIT', 323 ITR 397 (SC) which holds that after the amendment to Section 36 (1) (vii) of the IT Act, 1961 w.e.f. 01.04.1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable; and that it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. The Hon'ble Supreme Court remanded the matter to the Assessing Officer to examine solely to the extent of writ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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