CIT v. Makpar Exports (P.) Ltd.

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The Tax Publishers2013 TaxPub(DT) 1291 (MP-HC) : (2013) 052 (I) ITCL 0218 : (2013) 352 ITR 0401 Income Tax Act, 1961 --Business deduction under section 36(1)(vii)--Bad debts Assessee failed to prove debts as bad--Assessee claimed bad debts which was disallowed under section 36(2)(i) by assessing officer on the ground that no reasons were given for writing off the bad debts in the books of account. *Held:* After 1-4-1989, it is not necessary for assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of assessee. Income Tax Act, 1961 Section 36(10(vii) Income Tax Act, 1961 Section 36(2)(i) Income Tax Act, 1961 --Business lossAllowability Quality rejection Assessing officer made addition on account of the expenses debited under the head of quality rejection. Commissioner (Appeals) held that. The documents filed by assessee were clearly showing that part of the material supplied was rejected by the authorities in Ukraine. The reasons given was that the aforesaid material was found to be unfit for human consumption in Ukraine and if the aforesaid material was found unfit for human consumption in Ukraine, then it was also unfit for human consumption in India and, therefore, claim of the assessee was allowed. Claim of assessee was rightly allowed. Income Tax Act, 1961 Section 28(i) In the Madhya Pradesh High Court Krishn Kumar Lahoti & M. A. Siddiqui JJ. CIT v. Makpar Exports (P.) Ltd. ITA No. 38 of 2012 6 February, 2013 Appellant by : Sanjay Lal JUDGMENT Shri Sanjay Lal, counsel for the appellant. This appeal is directed against an order dated 20-10-2011, passed by the Income Tax Appellate Tribunal ('the ITAT) in I. T. A. Nos. 622 to 624/Ind/2010, the assessment years 2004-05 to 2006-07 by which an appeal preferred by the Department was dismissed in so far as the deletion of the addition of Rs. 24,59,783 on account of bad debts and the addition of Rs. 20,19,600 made on account of the expenses debited under the head of quality rejection by the assessing officer. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1291 (MP-HC) : (2013) 052 (I) ITCL 0218 : (2013) 352 ITR 0401

Income Tax Act, 1961

--Business deduction under section 36(1)(vii)--Bad debts Assessee failed to prove debts as bad--Assessee claimed bad debts which was disallowed under section 36(2)(i) by assessing officer on the ground that no reasons were given for writing off the bad debts in the books of account. Held: After 1-4-1989, it is not necessary for assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of assessee.

Income Tax Act, 1961 Section 36(10(vii)

Income Tax Act, 1961 Section 36(2)(i)

Income Tax Act, 1961

--Business lossAllowability Quality rejection Assessing officer made addition on account of the expenses debited under the head of quality rejection. Commissioner (Appeals) held that. The documents filed by assessee were clearly showing that part of the material supplied was rejected by the authorities in Ukraine. The reasons given was that the aforesaid material was found to be unfit for human consumption in Ukraine and if the aforesaid material was found unfit for human consumption in Ukraine, then it was also unfit for human consumption in India and, therefore, claim of the assessee was allowed. Claim of assessee was rightly allowed.

Income Tax Act, 1961 Section 28(i)

In the Madhya Pradesh High Court

Krishn Kumar Lahoti & M. A. Siddiqui JJ.

CIT v. Makpar Exports (P.) Ltd.

ITA No. 38 of 2012

6 February, 2013

Appellant by : Sanjay Lal

JUDGMENT

Shri Sanjay Lal, counsel for the appellant. This appeal is directed against an order dated 20-10-2011, passed by the Income Tax Appellate Tribunal ('the ITAT) in I. T. A. Nos. 622 to 624/Ind/2010, the assessment years 2004-05 to 2006-07 by which an appeal preferred by the Department was dismissed in so far as the deletion of the addition of Rs. 24,59,783 on account of bad debts and the addition of Rs. 20,19,600 made on account of the expenses debited under the head of quality rejection by the assessing officer.