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TMI Blog1994 (11) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 67,226 in the account of M/s Gian Chand Amir Chand. The assessee-firm filed its return of income for asst. yr. 1986-87 on 30th July, 1986. At that time, no claim on account of bad debts was made by the assessee. During the course of assessment proceedings, however, the assessee made a claim of bad debt of Rs. 67,226 in the account of M/s Gian Chand Amrit Chand, on 4th Nov., 1986. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year relevant to the asst. yr. 1986-87 it was not allowable as a deduction. She further directed the Assessing Officer to allow this in the year in which the bad debt is written off. 4. Shri Hari Om Arora, the learned counsel for the assessee, submitted that this claim of the assessee had not been allowed for asst. yr. 1986-87 because it had not been written off and it had also not been allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part thereof is written off as irrecoverable in the accounts of the previous year and the Assessing Officer is satisfied that such debt or part thereof became bad in any earlier previous year, then the provisions of s. 155(6) shall be applicable. It was, therefore, argued that even if the amount was actually written off in the subsequent year but the debt had become bad in the earlier year, it co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned counsel, if an amount is written off in a subsequent year but it is found that it had become bad in an earlier year, then the Assessing Officer has to pass a rectificatory order for the earlier year and allow the bad debt as a deduction under s. 155(6) of the Act. Since the debt has been actually written off in the subsequent year and had become bad in the year under consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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