2014 (4) TMI 782

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..... should have been given opportunity to consider the same and rebut the same if so desired. As far as the claim of bad debts regarding treating the same as irrecoverable – there was no error in the order of CIT(A) while allowing the claim following TRF. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] – it is not clear from the record that how much amount out of the total claim of the assessee is regarding the advances given to the various parties and whether the advances were given during the course of business of the assessee and can be allowed as business loss, which has not been properly examined, may be for want of necessary details – thus, the issue regarding claim of writing off of advances treating them a .....

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..... ete as the assessee furnished details only regarding 5 units out of 14 units and for the balance units no details of bad debts/irrecoverable advances were furnished. The AO also noted that the irrecoverable advances written off by the assessee were not taken as income in the P/L Account in the earlier years and further bad debts for the year under consideration were written off by the assessee without making any effort to recover the same. Accordingly, the AO disallowed the claim of the assessee. On appeal, CIT(A) has deleted the addition made by the AO and allowed the claim of assessee by following the decision of Hon'ble Supreme Court in the case of TRF Ltd. vs. CIT (320 ITR 397). 3. Before us, the ld. DR has referred the assessmen .....

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..... rom the godowns and therefore, the nonrecovery of the advances given in the course of business is allowable business loss. He has supported the order of CIT(A). 5. We have considered the rival submissions as well as relevant material on record. The AO has raised specific query and asked the assessee to furnish the party-wise details of bad debts and irrecoverable advances along with name and addresses of customers, bill nos., dates, amounts, purpose etc . The AO has also asked the assessee to show break-up of bad debts and advances separately along with copies of ledger account and sale bills. We note that the assessee has furnished the detail of the irrecoverable advances in composite amount without segregation of advances and bad debts .....

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