9911796707
TMI Blog2014 (4) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner (Appeals) has erred in deleting the disallowance of Rs. 2,90,68,996 on account of bad debt. 2. Facts in brief:- The assessee is a partnership firm engaged in the business of trading in spices, export and commission agency. The Assessing Officer noted that the assessee has debited an amount of Rs. 2,90,68,996 in the Profit & Loss account for the year ended 31st March 2006, which has been claimed as bad debt and, hence, allowable expenditure. He further observed that the assessee has not furnished any details as to which account have become irrecoverable and has become bad. He held that for treating any debt as a bad debt, it is not only the requirement to write-off the amounts in the books of account but the assessee also has to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f final order by the said DRT during the year under review." 4. Besides this, copy of accounts of the debtors was also placed to show that they were very old and irrecoverable and, hence, was written-off in the books of account. The relevant extracts of balance sheet as at 31 st March 2000, and also for the earlier years which are part of the income tax records were also filed. The reasons as to how the amounts in the account of the debtors have become bad were also narrated in detail which had been incorporated by the learned Commissioner (Appeals) from page-2 to 5 of the appellate order. The assessee's submissions and the records were also sent to the Assessing Officer for verification and the remand report was called for. After the rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore both the conditions of sec. 36(1)(vii) r/w section 36(2) are satisfied and the claim of the appellant as a bad debt deserves to be allowed. The details of the parties and the amounts, details of the port from where they were booked and their being part of sundry debtors is as follows:- Further, the examination of notes of the accounts in Schedule IX for 1998-99 clearly shows that the auditors had given the details of all the invoices and the happenings of cyclone at Kanda on 9/6/1998 destroying the goods on the basis of which the appellant then claimed a write off of the bad debts and the fact that the proceedings were pending in the Debts Re~ Tribunal which prevented the appellant from making any alternation in the Bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial year 1998-99 and how it has become bad. He also strongly relied upon the finding of the learned Commissioner (Appeals). 6. We have heard the rival contention and also perused the material placed on record. It is seen from the records that the assessee had continuously shown in its account that there were non-recoveries of the dues from the customers, which were earlier shown as sales in the books of account, owing to shipment defaults by the assessee on account of natural calamity in the form of cyclone at Kandla in the year 1998 in which the assessee suffered a huge loss of goods lying at docks and the adjacent stores. Owing to this non-fulfillment of outstanding contracts, the assessee in the passage of time decided to write off the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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