Court held that the Tribunal had not recorded a specific finding by assigning reasons that in the books of account the debts had been written off by the assessee. Only in a single sentence, it was stated that the assessee had in its books of account written off its debt as irrecoverable. The Assessing Officer and the Commissioner (Appeals) had also not recorded a specific finding that the assessee had written off the debts in the books of account. Since GIL had gone into liquidation and there was no trace of recovering the amounts of loans, advances and sundry debtors due from its associate company, the assessee had taken a view to write off such amount in its ledger of accounts during the previous year relevant to the assessment year 2001-02. The matter was remitted to the Assessing Officer to decide the issue in the light of law laid down by the Supreme Court in T. R. F. LTD. v. CIT ( 2010) 323 ITR 397 (SC), CIT v. Jaykrishna Harivallabhdas ( 1998) 231 ITR 108 ( Guj) (HC). ( AY.2001-02)
CIT (LTU) v. ABB Ltd . (2020) 425 ITR 677/ 274 Taxman 314 (Karn)( HC)
S. 36(1)(vii) :Bad debt – — Assessee only to establish that debt written off in accounts — Not necessary to establish that debt in fact had become irrecoverable — Law after 1-4-1989-Winding up — Diminution in value of investment made by assessee in company in liquidation —Capital loss – Matter remanded to the Assessing Officer . [ S.46(2) ]