It is not necessary for assessee to establish that debt has become irrecoverable

As is apparent from the aforesaid facts, the AO disallowed the claim of bad debts in the absence of any evidence as to when the amount was offered as income and there was nothing to show as to whether this amount had been actually written off in the books of account. On appeal, the ld. CIT(A) admitted the additional evidence in this regard while observing that though the basic information and requisite details regarding bad debts/advances written off were filed before the AO vide letter dated 24.12.2007 ,further branch wise details of outstanding dues were submitted by way of additional evidence to establish that outstanding debts/advances written off during the year under consideration pertained to the revenue recognized by the assessee. The ld. CIT(A) granted sufficient time of more than two years to the AO to examine the additional evidence and submit his report. It appears that the AO did not care to submit any report. In these circumstances, the ld. CIT(A) admitted the additional evidence and allowed the claim of the assessee, after examining the material on record and considering the additional evidence admitted by him ,in the light of decision of the ITAT and the Hon’ble jurisdictional High Court in the assessee’s own case for the AY 2003-04. We find that the Hon’ble Supreme Court in the case of TRF Limited vs. CIT 323 ITR 397 (SC) while adjudicating a similar claim concluded as under:

“This position in law is well-settled. After 1st April,1989 it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee………”

 In the light of view taken by the Hon’ble Apex Court in their aforesaid decision in TRF Ltd. (supra) and Hon’ble jurisdictional High Court in the assessee’s own case in the AY 2003-04 and the Revenue having not placed before us any material, controverting the aforesaid findings of the ld. CIT(A) nor brought to our notice any contrary decision, so as to enable us to take a different view in the matter, we are not inclined to interfere. In view thereof , ground no.2 in the appeal is also dismissed.

INCOME TAX APPELLATE TRIBUNAL, DELHI

ITA no.450/Del./2012 – Assessment year: 2005-06

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