VGA Digital Printers Eligible for Deduction in respect of Bad Debt from Reliance Communications: ITAT
The Pune Bench of the Earnings Tax Appellate Tribunal (ITAT) has lately held that the assessee, VGA Digital Printers Eligible for Deduction in respect of Dangerous Debt from Reliance Communications.
The assessee within the immediate case had written off Rs.19.22 Lakhs in its accounts as dangerous debt. Nonetheless, the Assessing Officer (AO) didn’t enable the deduction on the bottom that the assessee was nonetheless persevering with enterprise transactions with the corporate. The Commissioner of Earnings Tax (Appeals) [CIT(A)] affirmed the choice of the AO, in opposition to which the assessee has most well-liked the current attraction earlier than the Tribunal.
The assessee was represented by M.Okay. Kulkarni the income, by M.G. Jasnani.
The quantity receivable from Reliance Communications Ltd. after lot of e-mail correspondence with the corporate, together with, Mr. Anil Ambani for restoration of excellent quantities, was written off by the assessee.
The Pune Tribunal Bench of Vice President R S Syal and Judicial Member Partha Sarathi Chaudhury noticed that, the assessee did write off Rs.19,22,610/- as Dangerous Debt in its books of account. Mere writing off the quantity as dangerous debt is adequate for claiming deduction below Part 36(1)(vii) of the Earnings Tax Act, 1961.
It was additional famous that, “In case any restoration is made there after in opposition to the dangerous debt written off, such an quantity is chargeable to tax”, whereas setting apart the affirmation of disallowance of Rs.19,22,610/- in the direction of Dangerous Money owed.
Two further grounds which weren’t pressed had been dismissed by the tribunal. These embody the grounds raised in opposition to the disallowance of Rs.1,29,167/-, being, declare in the direction of Gratuity Fund and a normal floor that was dismissed as ‘not pressed’.
Nonetheless, a declare in opposition to the affirmation of disallowance of Rs.60,15,400/- in the direction of Wage and Bonus to Administrators, whereby the AO had made out a case that if the assessee firm had paid dividend as an alternative of remuneration to administrators, such cost would have been fetched extra tax was allowed.
It was noticed that, “assessee justified the cost of such wage and bonus to administrators and in addition complied with the mandatory provisions below the Corporations Act, 1956 on this regard,” and held that “we’re happy that no case has been made out for any disallowance.”
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