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TMI Blog2021 (8) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... een written off as irrecoverable by the assessee and it was not necessary to establish that the debt has actually become bad - HELD THAT:- In this case, the consideration paid as service tax was to be claimed as receivable from DIP. In the assessment year under consideration, the assessee came to know that it is not recoverable and has written off as bad debts in the books of account. The only contention of the ld. DR is that since it has not routed through Profit Loss account, it cannot be allowed as bad debt - argument of the ld. DR is not tenable and cannot be accepted on the reason that service tax is shown as receivable from the DIP which was not received on the fact that DIP is not paying service tax in view of the guidelines of the DAVP of the Central Govt. and it is also not paying service tax to any other advertising agencies. However, the assessee has already paid this amount to the Government. Since service tax payment recovery is denied by the DIP, the assessee has written off it as bad debt. Therefore, we are of the view that the assessee is justified in claiming it as bad debt by writing off in the Profit Loss account. Accordingly we allow the claim of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,18,128/- 5 The Learned Appellate Commissioner erred in upholding the disallowance of ₹ 9,80,516/- u/s 36(1)(vii)of the Act for the A.Y. 2013-14 with complete disregard to the provisions of Sections 198, 199, 36(1)(vii) and other applicable provisions of the Income Tax Act. 3,18,128/- 6 The Learned Appellate Commissioner erred in upholding interest levied by the Respondent Officer under section 234B of the Income Tax Act, 1961. 10,12,449/- 2. The additional grounds raised by the assessee are as follows:- 1. The Learned Appellate Commissioner ought to have, alternatively, allowed deduction of ₹ 9,80,516/- as deduction of business expenditure u/s 37 (1) of the Income Tax Act in so far as the said Income Tax Deducted at Sources made out of the Trade Bills of the Appellant were treated and assessed as income in the past years u/s 198 of the Act, once he decided to disallow the claim of deduction u/s 36(1)(vii) of the Act for the A.Y.2013-14. 2. The Learned Appellate Commissioner ought to have, alternatively, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of TDS issued by the deductor. First of all, the assessee has not furnished the TDS certificate to the corresponding amount of ₹ 9,80,516. Without furnishing these details, the assessee is claiming benefit of TDS refund. Since the TDS was not given credit, the assessee is claiming the same as bad debts u/s. 36(1)(vii) of the Act. 8. Similar issue came up for consideration before the Kolkata Bench of the Tribunal in ITA No.927/Kol/2013 in the case of Mc Nally Sayaji Engineering Ltd. v. ACIT and by order dated 10.03.2017 it was held as under:- With regard to allowability of TDS recoverable written off is concerned, we find that the assessee had filed the details of the same before the ld AO , wherein it was clearly mentioned that the assessee had decided to write off the same due to non availability of TDS certificates. Since the recoverability arose only in the form of collection of TDS certificates, it goes beyond doubt that the assessee had offered the same as income in the earlier years as admittedly the TDS would be relatable to income only. Moreover, we hold that there is no requirement to satisfy the test of offering of income in the earlier years in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the other advertising agencies also. Hence it was written off as bad debt and the same has to be allowed or otherwise it should be allowed as business loss u/s. 37(1) of the I.T. Act. 11. On the other hand, the ld. DR submitted that the assessee has not offered it as income and it was only a statutory liability routed through balance sheet and write off cannot be allowed as bad debt in terms of section 36(1)(vii) r.w.s. 36(2) of the Act. The alternative contention of the assessee is that if it is not allowed as bad debt, the same has to be allowed as business loss as the assessee has already made payment on this count to the Government authority. According to the ld. DR, this contention is also not having any merit. 12. We have heard both the parties and perused the material on record. The contention of the ld. AR is that the claim of bad debt was allowable to the assessee if the same has been written off as irrecoverable by the assessee and it was not necessary to establish that the debt has actually become bad. The ld. AR submitted though service tax was routed through balance sheet, the relevant income relating to this transaction was offered to tax and assessee fail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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