vrd 1 ITXA527/12 IN HIGH COURT OF JUDICATURE AT BOMBAY rt ORDINARY ORIGINAL CIVIL JURISDICTION ou INCOME TAX APPEAL NO.527 OF 2012 C Commissioner of Income Tax 5, ...Appellant v/s M/s Essar Teleholdings Ltd. ...Respondent h Mr Abhay Ahuja with Ms Padma Divakar for Appellant. ig None for Respondent. H CORAM : S.C. DHARMADHIKARI AND B.P. COLABAWALLA JJ. y DATE : 7TH AUGUST 2014. ba P.C. : 1. We have heard Mr Ahuja, learned counsel appearing om on behalf of Appellant. Appeal challenges order passed by Income Tax Appellate Tribunal, Bench 'E', Mumbai B dated 12th August 2011. Assessment Year in question is 2004 05. 2. two questions which are projected as substantial questions of law read as under : ::: Downloaded on - 10/08/2015 17:08:43 ::: vrd 2 ITXA527/12 (A) Whether on facts and circumstances of case and in law, Hon'ble ITAT is right in setting aside and restoring back issue to file of AO for rt de novo adjudication in light of provisions of Rule 8D ? ou (B) Whether on facts and circumstances of case and in law, Hon'ble ITAT is right in allowing bad debts claimed by assessee even same C were not offered as income in earlier years as per provisions of section 36(2)(1) ? h 3. In relation to first question, it is fairly stated by Mr ig Ahuja that same is covered in favour of Assessee and H against Revenue by Division Bench judgment of this Court in case of Godrej and Boyce Manufacturing Co.Ltd. v/s y Deputy Commissioner of Income Tax and anr., reported in ba (2010) 328 ITR 81 (Bom). Consequently, this Appeal does not om raise any substantial question of law in relation to question (A) above. B 4. In relation to question (B) and which is reproduced above, Mr Ahuja submits that Tribunal has not assigned any reasons and judgment of Hon'ble Supreme Court applied and followed does not lay down principle that sub section (2) of section 36 and particularly clause (i) thereof can be ignored. ::: Downloaded on - 10/08/2015 17:08:43 ::: vrd 3 ITXA527/12 In other words, in making any deduction for bad debt or part thereof, that deduction shall be allowed only if such debt or part rt thereof has been taken into account in computing income of ou Assessee for previous year in which amount of such C debt or part thereof is written off or for earlier year or represents money lent in ordinary course of business of h banking or money lending which is carried on by Assessee. ig 5. Tribunal found on facts that Assessing Officer H and CIT (Appeals) both were in error in ignoring amendment and which has been brought on statute book y with effect from 1st April 1989. Section 36(vii) which has been ba amended does not require Assessee to establish that debt om written off was bad and all that is required is it being written off as such. CIT as also Assessing Officer have tried to B overcome this legal position by seeking explanation from Assessee. In relation to that, they have observed that Appellant / Assessee has not given any details or justification on this aspect in earlier years. That certainly was not requirement in given facts and circumstances and therefore disallowance could not be upheld. That would also have ::: Downloaded on - 10/08/2015 17:08:43 ::: vrd 4 ITXA527/12 gone contrary to judgment of Supreme Court delivered in case of T.R.F. Ltd. v/s CIT, Ranchi in Civil Appeal Nos.5292 rt and 5293 of 2003, both decided on 9th February 2010. ou 6. In our view, Tribunal did not commit any error in C recording factual finding that in present case that bad debt can be written off as irrecoverable. In such circumstances, h ig even second question cannot be substantial question of law. appeal is therefore devoid of any merit and is dismissed. H y ( B.P. COLABAWALLA J.) (S.C. DHARMADHIKARI J.) ba om B ::: Downloaded on - 10/08/2015 17:08:43 ::: Commissioner of Income-tax-­5 v. M/s Essar Teleholdings Ltd