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TMI Blog2015 (2) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... for Assessment year 2008-09 2. First we shall take up the cross appeals for assessment year 2008-09, which are directed against the order of the learned Commissioner of Income-tax(Appeals) II, Hyderabad dated 18.11.2013. The solitary issue involved in these appeals relates to the disallowance of Rs. 108.28 crores made by the Assessing Officer on account of bad debts which has been sustained by the learned Commissioner of Income-tax(Appeals) to the extent of Rs. 89.45 crores. 3. The assessee in the present case is a company owned by the State Government of Andhra Pradesh. It is engaged in the business of distribution of electrical power. The return of income for the year under consideration, i.e. assessment year 2008-09 was filed by it on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted an allowable expenditure for the year under consideration, the same was liable to be disallowed. Accordingly, the claim of the assessee for doubtful debts amounting to Rs. 108.28 cores was disallowed by the Assessing Officer in the assessment completed under S.143(3) vide order dated 29.12.2010. 4. Against the order passed by the Assessing Officer under S.143(3), an appeal was preferred by the assessee before the learned CIT(A), disputing the disallowance made by the Assessing Officer on account of doubtful debts. After considering the submissions made by the assessee and the material available on record, the learned CIT(A) held that an amount of Rs. 89.45 crores representing outstanding wheeling charges was a recoverable demand, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n question represents provision made by the assessee for bad debts, and it is thus not a case where assessee can be said to have written off the relevant debts as irrecoverable in the books of account. The learned counsel for the assessee, however, has submitted that even though the nomenclature used by the assessee is provision for bad and doubtful debts, the relevant debts claimed as bad have actually been written off as irrecoverable in the books of the assessee for the year under consideration. Keeping in view the submissions made by both the sides, we consider it fair and proper to restore this issue to the file of the Assessing Officer for the limited purpose of verifying as to whether the relevant debts claimed as bad have actually b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not in consonance with the decision of the Hon'ble Supreme Court in the case of TRF Limited V/S. CIT (323 ITR 397). Keeping in view the submissions made by both the sides, which are similar to the ones made for the assessment year 2008-09 and discussed above, we consider it fair and proper to restore this issue to the file of the Assessing Officer for the limited purpose of verifying as to whether the relevant debts claimed as bad have actually been written off by the assessee in the books of account for the year under consideration as irrecoverable. If it is found on such verification that the relevant bad debts have actually been written off as irrecoverable by the assessee, the Assessing Officer is directed to allow the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the assessee for assessment year 2009-10 for the limited purpose of verifying as to whether the relevant debts claimed by the assessee as bad have already been written off in the books of account as irrecoverable. In our opinion, this aspect has a direct bearing on the issue involved in ground no.2 of the Revenue's appeal in as much as if the relevant debts claimed to be bad by the assessee, are found to have been written off in the books of account as recoverable, no disallowance can be made on account of bad debts written off either while computing the income of the assessee under the normal provisions of the Act or even for computing the book profit of the assessee under S.115JB of the Act. On the other hand, if it is found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to verify and allow expenditure if each item is less than Rs. 5,000/-. Therefore, this ground of appeal is partly allowed." As it is clearly evident from the relevant portion of the impugned order of the learned CIT(A) reproduced above, it is not a case of granting 100% depreciation on assets having value below Rs. 5,000 as made out by the Revenue in its ground. As a matter of fact, the case of the assessee before the learned CIT(A) was that the amount in question represented small spares worth less than Rs. 5,000 purchased during the year under consideration, and the learned CIT(A) directed the Assessing Officer to verify this claim of the assessee and allow appropriate relief. Revenue thus, cannot be said to have any grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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