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TMI Blog2015 (11) TMI 1670X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts as irrecoverable, same shall be allowed to the assessee as deduction. It is admittedly written off in the book of accounts of the assessee as “ loss on foreclosure of loan assets” . Thus the assessee satisfies all the conditions of allowabaility of this sum as deduction u/s 36(1) (vii) rws 36(2) of the Income Tax Act. As the sum is written off in the books of accounts by writing of the loan amount of the borrower on negotiation cannot be called a future or probable loss but ascertained and accrued loss in the business of financing. Though the cases relied up on by the assessee relates to the issues of loss on sale of repossessed vehicle, Honourable Delhi High court in case of CIT V CITI CORP Maruti Finance Limited [2010 (11) TMI 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the loss on foreclosure of loan assets is akin to the loss was on account of loss on sale of repossessed assets? 3. The order of the learned CIT (APPEALS) is erroneous & contrary to facts & law. 4. That the grounds of appeal are without prejudice to each other." 03. The facts in brief of the case are that the assessee is an NBFC engaged in the business of auto finance, lease and hire purchase. It finances to customers buying vehicles and auto products particularly manufactures under „Maruti‟ brand. The assessee filed return of income declaring an income of ₹ 18,18,75,550/- on 27.09.2009 for the Assessment Year 2009-10.The case was selected for scrutiny and statutory notice u/s 143(2) and 142(1) of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncements which are related to loss arising on account of repossessed vehicles in case of NBFCs. CIT A() also held that this deduction is of similar nature. 06. Aggrieved by the order of Ld. CIT (A) revenue is in appeal before us. Before us LD DR submitted that the decision relied up on by the CIT (A) are not applicable on the facts of the case as those decision are related to loss arising on repossessed vehicles and this case is claimed of loss on account of renegotiated debts at lesser amount and then claiming such lesser amount claimed as deduction as bad debt. Therefore CIT (A) has wrongly allowed the claim of the assessee. 07. Ld AR on other hand submitted that there is no difference between the nomenclature on both these transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputing the income referred to in section 28- (vii) subject to the provisions of sub-section (2), the amount of [any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year] : Provided that in the case of [an assessee] to which clause (viia) applies, the amount of the deduction relating to any such debt or part thereof shall be limited to the amount by which such debt or part thereof exceeds the credit balance in the provision for bad and doubtful debts account made under that clause : Explanation - For the purposes of this clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee shall not include any provision for bad and doubtful d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of loss on sale of repossessed vehicle, Honourable Delhi High court in case of CIT V CITI CORP Maruti Finance Limited in ITA No 1712 & 1714 /20109/11/2010 has held that even loss on repossessed vehicle sold is also allowable to the assessee u/s 36(1) rws 36 (2) of the act. Honourable Delhi High court also held that such deduction was also covered in favour of the assessee by the decision of Honourable Calcutta High court in case of A W Figgies & Co Pvt Limited 254 ITR 63. Above decision of Honourable Delhi high court has been upheld by Hon Supreme court in CC 22330/2011 dated 13/1/2012. Further the claim of the assessee in writing off of the bad debt is on stronger footing on the cases relied up on by the assessee. In view of above facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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