Louis Berger Group Inc Vs ACIT (ITAT Delhi)
ITAT Delhi held that the assessee is not required to prove that a particular debt had become bad debt in order to claim deduction on account of bad debt written off pursuant to the amendment made u/s 36(1)(vii) of the Income Tax Act after 01.04.1989.
Facts- During the course of assessment proceedings, AO noticed that the assessee had written off a sum of Rs. 11,22,24,005/- towards amounts receivable from M/s. Louis Berger Consulting Pvt. Ltd on one hand and on the other hand, the assessee had paid consultancy fees of Rs. 42.64 crores to the same concern during the year and did not choose to adjust the amount receivable from the said concern with the consultancy fees payable to the same concern. Accordingly, AO issued a show cause notice on 10.09.2022 to explain the assessee as to why the deduction claimed on account of bad debts written off be not disallowed.
Conclusion- Held that the assessee had duly complied with all the conditions prescribed in Section 36(2) read with section 36(1)(vii) of the Act to claim deduction on account of bad debts. The assessee is not required to prove that a particular debt had become bad debt in order to claim deduction on account of bad debt written off pursuant to the amendment made u/s 36(1)(vii) of the Act after 01.04.1989.
