The Commissioner Of Income Tax – Iv, Pune v. Shri Tilokchand B. Shah, Solapur

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2662 OF 2009 The Commissioner of Income Tax – IV, Pune Versus Shri Tilokchand B. Shah, Solapur ..Appellant. ..Respondent. Mr.Vimal Gupta for the appellant.None for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 8 June, 2010. P.C. : 1.The issue in the appeal by the Revenue is whether the Tribunal was justified in allowing the claim of bad debts of Rs.26,35,523/-. The order of the Tribunal relates to assessment year 2003-2004. The assessee had written off and claimed bad debts in the aforesaid amount in the return for assessment year 2003-2004. Though the assessee had a decree in its favour, the decree was passed as far back as in 1994 and the contention of the assessee was that certain property at Kolhapur could not be auctioned on account of a dispute with the local owners. Hence, the amount was considered as unrealizable and was written off. 2.The assessee having written off the debts during the course of assessment year 2003-2004, the Tribunal was justified in allowing the claim. Though there was a consent decree, it has been passed as far back as in 1994 and the amount was unrealizable. 3.That apart, our attention has been drawn to the judgment of the Supreme Court in T.R.F. Limited V/s. Commissioner of Income Tax (CivilAppeal 5293 of 2003)decided on 9 February 2010. The Supreme Court has clarified that after the amendment of Section 36(1)(vii) with effect from 1 April 1989, it is not necessary for the assessee to establishthat the debt has not been recoverable and it is sufficient if the bad debt is written off as irrecoverable in the accounts of the assessee. 4.Consequently, both on facts and in law, the order of the Tribunal does not suffer from any infirmity. 5.The appeal by the Revenue does not give rise to any substantial question of law. The appeal is accordingly dismissed. There shall be no order as to costs. (Dr.D.Y. Chandrachud, J.)