Bad debt cannot be disallowed merely because its of Group Company

CA Sandeep Kanoi In this case During scrutiny assessment proceedings, the Assessing Officer inter alia disallowed writing off of bad debts of M/s. Kinetic Motor Co. Ltd. amounting to Rs.1,27,58,427/- as the same was Group Concern and AO further claimed that The debts have been written off as bad debts only to suppress the income. It is the strategy of the group to reduce the income of the profit making group companies and thereby reducing the incidence of tax. CIT (A) allowed the claim of the assessee and revenue preferred Appeal against the Order of CIT(A) with ITAT. The ld. AR submitted that...