9911796707
TMI Blog2017 (2) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... at:- The only requirement for allowability of the bad debts is that the assessee should write off the bad debts as irrecoverable in its accounts in the relevant year. Admittedly, the assessee has written off the bad debts to the extent of ₹ 2,59,041/- by way of debit to the profit & loss account.In this case, debit to the profit & loss account was only for ₹ 2,59,041/- while the Assessing Officer made the disallowance of ₹ 9,35,706/-, at the same time also making separate addition for the cessation of liability. Be that as it may, we are of the opinion that the assessee is entitled to the deduction of bad debts in view of the above decision of Hon'ble Apex Court in the case of T.R.F. Limited. [2010 (2) TMI 211 - SUPREME COURT] - Decided against revenue Addition in respect of HRA paid to the Managing Director as excessive in nature - Held that:- HRA paid to the directors will be considered as perquisites in the hands of Directors. There cannot be evasion of tax as the directors are paying tax on the perquisites received. We are setting aside this issue to Ld. AO to verify whether such income has been treated as prerequisite in the hands of the Directors and to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole time director 1,51,61,188 Disallowed u/s 36(l)(ii) Out of foreign travel expenses 1,79,704 Held personal in nature Credit balance written back 74,943 Written back trading liability is the deemed income u/s 41(1) Out of HRA paid to Managing Director 3,00,000 Held as excessive u/s 40A(2)(b) Particulars Amount (Rs) Reasons considered by AO for disallowance Commission paid to 1,51,61,188 Disallowed u/s 36(l)(ii) Managing director /whole time director Out of foreign travel expenses 1,79,704 Held personal in nature Credit balance written back 74,943 Written back trading liability is the deemed income u/s 41(1) Out of HRA paid to 3,00,000 Held as excessive u/s 40A(2)(b) Managing Director 3. Aggrieved by order of Assessing Officer assessee preferred an appeal before Ld. CIT(A). Ld. CIT(A) deleted the addition made by AO in respect of the commission paid to the managing director, travel expenses incurred by assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In respect of the addition that has been deleted by Ld. CIT(A) made on account of foreign travelling expenses treating the same as personal in nature. 9. Ld. DR relied upon the orders passed by the assessing officer. 10. Ld. AR submitted that assessee incurred ₹ 8,98,520/- on account of foreign travelling during the year by the ITA no. 917/Del/2014 (AY 2010-11) directors. The statement of the foreign travel expenses has been filed along with details of directors, their passport copies, copies of bills of expenses and the comparative party wise detail of the export sales made by the assessee during the year under consideration as well as the preceding years were filed before Ld. CIT(A). It has been submitted by Ld. AR that the addition made by assessing officer was on an ad hoc basis. 11. Ld. AR supported the order passed by Ld. CIT(A). 12. We have perused the submissions advanced by both the sides and the light of the documents placed on record before us. 13. Assessing officer in his order has recorded a finding that the assessee has furnished details of the managing director and director operations along with supporting documents. He has also admitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on similar facts for assessment year 2008-09 and 2009-10. Ld. CIT(A) has observed that assessee has shown the net amount of bad debts in the profit and loss account claiming the net expenses. It has been observed that assessee has included the credit balance written back in its income. It is on the similar principle that this Tribunal for assessment year 2008-09 and 2009-10 in assessee's own case in ITA No. 3255/Del/2011 with CO No. 234/Del/2011 and 5362/Del/2012 respectively, has allowed the claim of the assessee. This Tribunal has observed as under: 11. We have carefully considered the submissions of both the sides and perused the material placed before us. So far as the addition for cessation of liability is concerned, we are of the opinion that the assessee itself has considered the cessation of liability as its income. Therefore, no further addition can be made. So far as allowability of bad debts is concerned, Hon'ble Apex Court in the case of T.R.F. Limited (supra) held as under:- ITA no. 917/Del/2014 (AY 2010-11) After the amendment of section 36(1)(vii) of the Income- tax Act, 1961, with effect from April 1, 1989, in order to obtain a deduction in r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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