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TMI Blog2023 (4) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... deration the details filed by the assessee. CIT initiated 263 proceedings on the ground that the claim was not allowable u/s. 36(2) of the Act. In appeal before Tribunal, the ITAT [ 2007 (3) TMI 313 - ITAT HYDERABAD-A] held that the assessee had categorically submitted the details of bad debts before the Assessing Officer during the course of assessment proceedings and the same were considered by the Assessing Officer. Accordingly, the ITAT set aside the 263 order passed by the PCIT. In further appeal to the High Court by the Department, the High Court [ 2011 (4) TMI 805 - DELHI HIGH COURT] held that the PCIT in the instant facts was not justified in setting aside the order of the Assessing Officer and invoking revisional power u/s. 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prejudicial overlooked the fact that an explanation on each and every item of claim of bad debts/ advances written off including the amounts stated in the notice u/s 263 issued was submitted during assessment proceedings by the appellant. 4. Ld. Pr. CIT erred in law and on facts in revising order passed u/s 143(3) of the Act not appreciating that some of the amounts claimed as bad debts on which show cause notice was issued was already disallowed by AO when not satisfied with the explanation submitted by the appellant. 5. Ld. Pr. CIT erred in law and on facts revising scrutiny assessment order merely because he held a different opinion than AO in the matter. 6. Ld. Pr. CIT erred in law and on facts holding assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry. Accordingly, the PCIT set aside the assessment order u/s. 263 of the Act for fresh adjudication in the light of the above observations. 4. The assessee is in appeal before us against the aforesaid order passed by PCIT setting aside the assessment order on the ground that the same is erroneous and prejudicial to the interest of the Revenue. Before us, the counsel for the assessee at the outset drew our attention to the show cause notice issued by the PCIT and submitted that the ld. PCIT has given a table containing party-wise details of advances and security deposits written off by the assessee during the year under consideration. The PCIT initiated 263 proceedings on the ground that the Assessing Officer has failed to verify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36(2) of the Act. Therefore, the order passed by the Assessing Officer is not erroneous and prejudicial to the interest of the revenue. 5. In response, the ld. Departmental Representative placed reliance on the observations made by PCIT in 263 order. Further, the Departmental Representative submitted that Assessing Officer has not appreciated the facts from the correct perspective and has not given a detailed finding as to why the claim of the assessee should be allowed u/s. 36(2) of the Act with respect to some of the parties. 6. We have heard the rival contentions and perused the material on record. We observe that 263 proceedings were initiated by the ld. PCIT and the assessment order was held to be erroneous and prejudicial to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to seven parties u/s. 36(2) of the Act. Therefore, in the instant facts, we observe that neither it is a case of lack of inquiry nor it is a case of non-application of mind by the Assessing Officer on the issue of allowability of claim of deduction by the assessee u/s. 36(2)(i) of the Act. In the case of DCIT vs. Insilco 12 taxman.com 251, the assessee claimed bad debts on the ground that the amount were irrecoverable. During the course of original assessment proceedings, the assessee had given all details of debts and steps were taken by the assessee for recovery of those amounts, which he ultimately failed to recover. The Assessing Officer allowed the deduction after taking into consideration the details filed by the assessee. The Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business loss in the event the Commissioner (Appeals ) felt that the claim was not allowable under section 36(1)(vii) . However, the Commissioner (Appeals) rejected the contentions of the assessee only on the ground that the Assessing Officer had not properly examined the details furnished. The non-recording of all details and the detailed discussion which had taken place in the course of assessment proceedings could not be faulted on the assessee or it could not be said that the assessing authority had not applied his mind on the details filed. It did not give occasion to the Commissioner for invoking the powers under section 263. [Para 8] The Tribunal further observed that the decision of the Assessing Officer was based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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