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TMI Blog2015 (7) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... d paid taxes on the said amount. In the subsequent year when they were sure that they are not getting any portion of the said amount, they wanted to treat it as a bad debt and write off the said claim. Accordingly, they sought for deduction of the said amount out of the total income. Once the assessee writes off a claim in its books of account treating it as a bad debt under section 36(1)(vii) rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined. Decided in favour of the assessee. - IT APPEAL NO. 718 OF 2009 - - - Dated:- 2-12-2014 - N.KUMAR AND B. MANOHAR, JJ. For The Appellant : S. Parthasarathi, Adv. For The Respondent : K.V. Aravind, Adv. JUDGMENT N. Kumar, J. - The assessee has preferred this appeal against the order passed by the Tribunal which has declined to allow deduction of ₹ 2,85,75,000/- as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Provisions of Section 36(1)(vii) of the Act cannot also be applicable as it could not be treated as debt at all. Therefore all the three authorities disallowed the said claim, hence this appeal. 3. The appeal was admitted to consider the following substantial questions of law: (a) Whether in law, the Tribunal was right in holding that the expenditure towards warranty claim written off dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute. The assessee company voluntarily recognized and credited warranty expenses of TAFE, PSD in the assessment year 2002-03 and paid taxes on the said amount. In the subsequent year when they were sure that they are not getting any portion of the said amount, they wanted to treat it as a bad debt and write off the said claim. Accordingly, they sought for deduction of the said amount ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing recovered, it is treated as a bad debt and deduction is claimed. 5. In that view of the matter, the impugned orders passed by the authorities cannot be sustained. The substantial questions of law are answered in favour of the assessee and against the revenue. Hence we pass the following order:- The impugned order is hereby set aside. The appeal is allowed. - - TaxTMI - TMITax - I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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