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TMI Blog2018 (5) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the additional income declared by the assessee before the Settlement Commission was taken as income. Hence the submission for the assessee has force. We accept the same and consider that the source of funds for deposits aggregating to ₹ 20,62,298/-, made during the year, as explained by the opening cash balance of the year. - Decided in favour of assessee Provision for bad debts allowability - Held that:- What was created was a provision for doubtful debts. It is not a case where the bad debts were written off in the accounts. On the contrary, the provision for doubtful debts continues to be in the accounts and is reflected in the balance sheet. The decision in the case of Vijaya Bank V. CIT [2010 (4) TMI 46 - SUPREME COURT ] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque or by way of transfer of funds, on the ground that the sources for making these deposits were not explained by the assessee. Further undisclosed interest income of ₹ 3193.44/- was added. The assessee claimed deduction for provision for doubtful debts of ₹ 10,66,700/-. This was disallowed as the assessee did not write off the debts in his books of accounts. Aggrieved, the assessee carried the matter in appeal without success. 3. Further aggrieved, the assessee is in appeal before us. 4. Ms. Parnashree Banerjee, the ld. Counsel for the assessee, submitted that the assessee had filed an application before the Settlement Commission for the Assessment Years 2006-07, 2007-08, 2008-09, 2010-11 2011-12 and along with thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment Year 2009-10, by separate orders at different points of time, application for the Assessment Year 2010-11 and 2011-12 was accepted and for the earlier years the Assessing Officer in his assessment order passed u/s 143(3) of the Act, has not disturbed the closing cash balance reflected by the assessee. She drew a comparison between the facts of the case of the assessee and that of the case of Shri Kalidas Ghosh (supra), and submitted that the issue is covered in favour of the assessee. On the issue of provision for bad debts, she submitted that it was a case where the amount was not recoverable from two parties to whom the assessee had supplied goods and the assessee had shown the provisions of bad debts on the debit side of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows:- The assessee submitted a copy of the assessment order passed by the Assessing Officer for the Assessment Year 2008-09. This was passed u/s 147 r.w.s. 143(3) of the Act on 29/03/2017. The balance sheet of the assessee has been recast by including income disclosed while filing an application before Hon ble Income Tax Settlement Commission, Kolkata Bench for the Assessment Year 2006-07, 2007-08, 2008-09, 2010-11 and 2011-12. It is true that the application for the Assessment Year 2006-07, 2007-08 and 2008-09, was not admitted by the Settlement Commission but the additional income disclosed in the application filed before the Settlement Commission formed the basis of assessment for the Assessment Year 2007-08. It is clear from the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult, this addition of ₹ 20,62,298/-, made u/s 68 of the Act is deleted. 7. The second issue is the provision for bad debts. 7.1. The assesse submits that thought the terminology used is provision for doubtful debts , but in fact it is, write off of a debt . The facts are that the assessee has sold goods worth ₹ 18,39,205/- to M/s. Jaipuria Electricals (P) Ltd., out of which ₹ 5,39,205/- remained unrecovered. Similarly, the assessee sold goods worth ₹ 55,318/- to M/s D.N. Enterprises during the Financial Year 2008-09 in addition to the goods sold in the earlier years, for which amount was due. There was a balance in that account showing total dues from M/s D.N. Enterprises. The closing balance at the end of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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