9911796707
TMI Blog2021 (4) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 8.39 crores. 2. The assessee is engaged in the business of providing finance and investment services. The return of income filed by the assessee for assessment year 2013-14 was taken up for scrutiny. The A.O. noticed that the assessee has claimed bad debts written off amounting to Rs. 8.39 crores. In response to the query raised with regard to the above said claim, the assessee submitted that the above said amount was given to a company named M/s. Marmagoa Steel Limited ("MSL"). It was submitted that the assessee was a co-promoter of above said company under a BIFR approved rehabilitation programme. Since the assessee held majority stake in MSL, the assessee had also extended support in the form of unsecured loans. It was submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties on this issue and perused the record. The Ld. A.R. submitted that the operations of M/s. MSL were stopped in June, 2013. The Ld. A.R. submitted that factum of stoppage of production for MSL came to the knowledge of the assessee before finalization of the accounts for the year ending 31.3.2013. Hence, the assessee chose to write off the amount receivable from MSL. He further submitted that the assessee is engaged in the business of giving finance and investment services. The assessee has given the loan to MSL in the course of its business and hence the writing off of the same is allowable u/s. 36(1)(vii) of the Act. 5. It was pointed out to Ld. A.R that the Accounting standard-4 issued by ICAI relating to Contingencies and events occu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above, we are of the view that the disallowance of bad debts claimed by the assessee in assessment year 2013-14 was justified as the assessee could not establish that there existed business compulsion to write off the loan amount given to MSL as on 31.3.2013. At the same time, it is an admitted fact that the loan given to MSL has become bad. It is also corroborated by the fact that MSL has also written off the amount payable to the assessee in A.Y. 2015-16. In view of the above, we are also of the view that the bad debts claim of the assessee should be examined only in assessment year 2015-16. 9. Since we have given a specific finding that the above said claim is required to be examined in assessment year 2015-16, the assessee may move a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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