Bad debts W/o cannot be disallowed for non-filing of suit to recover Bad debts

Pr. CIT Vs. Rajasthan State Beverages Corpn. Ltd. (Rajasthan High Court)

Privilege fee paid to Government is allowable as revenue expenditure

This Court has extensively considered the aforesaid two questions in assessee’s own case vide judgment and order date 26-5-2016 referred to (supra) and has held that the privilege fees being a revenue expenditure, is required to be allowed as a revenue expenditure

PF and ESI payments were made beyond due dates under relevant statutes, however, same were paid before due date under section 139(1), therefore, no dis allowance could be made under section 36(1)(va) read with section 43B.

Section 36(1)(vii) Bad debts written off cannot be disallowed merely on the ground of non-filing of suit to recover such advances

Admittedly, the amounts were lying outstanding for the last couple of years and the assessee has rightly written off the said amount in the books of account and merely because a suit was not filed and that cannot be considered to be a cogent reason to disallow the claim which became bad. One need not incur good money for recovery of the so called irrecoverable or a bad money and file a suit which remains pending for years and with uncertainty.

Author Info

Name: CA Sandeep Kanoi

Qualification: CA in Job / Business

Company: Taxguru Consultancy

Location: Mumbai, Maharashtra

Articles Published: 19,237

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