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TMI Blog2017 (2) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... 51,280/- fully as made by Ld. AO u/s 36(i)(iv) on account of bed debts and the impugned addition has been made without appreciating the facts and circumstances of the case and by recording incorrect facts and findings. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making adhoc disallowance of Rs. 32,340/- on account of advertising expenses. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not deleting the disallowance of Rs. 3,25,851/- fully as made by Ld. AO on account of foreign traveling expenses and the impugned addition has been made without appreciating the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds as reproduced above. 3. In ground No. 1, the assessee has challenged sustaining by the learned Commissioner of Income-tax (Appeals) of amount of Rs. 9,51,280/-disallowed by the Assessing Officer under section 36(1)(vii) of the Act on account of bad debts. 3.1 The facts in respect of issue in dispute are that the Assessing Officer observed claim of bad debt in respect of M/s. Poorti Rental Car and Logistics Private Limited, amounting to Rs. 9,51,280/-. On behalf of the assessee, it was explained that the assessee supplied petroleum products to the said party and received two posts dated cheques amounting to Rs. 3,87,398/- dated 26/04/2008 and Rs. 2,30,978/- dated 08/05/2008. It was further explained that said cheques were dishonoured a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the financial year before signing of the balance sheet. After considering the submission of the assessee, the learned Commissioner of Income Tax (Appeals) held that the amount in question was alive till the end of financial year relevant to assessment year under consideration as the appellant had shown this amount in books as its sundry debtor as on 31/03/2008, thus the amount in question did not become bad in assessment year under consideration and the assessee could write off an amount in the concerned assessment year, in which it is found as irrecoverable. 3.3 Before us, the learned Authorized Representative of the assessee submitted that the debt in question was written off in the financial year relevant to the assessment year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. However, in the present case, the Assessing Officer has not examined whether the debt has, in fact, been written off in accounts of the assessee. When bad debt occurs, the bad debt account is debited and the customer's account is credited, thus, closing the account of the customer. In the case of Companies, the provision is deducted from Sundry Debtors. As stated above, the Assessing Officer has not examined whether, in fact, the bad debt or part thereof is written off in the accounts of the assessee. This exercise has not been undertaken by the Assessing Officer. Hence, the matter is r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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