V AND S INTERNATIONAL PVT LTD,GURUGRAM vs. JOINT COMMISSIONER OF INCOME TAX, DELHI

Though the assessee has raised several grounds of appeal before us, the only effective issue to be decided in this appeal is as to whether the learned CITA was justified in confirming the disallowance of write-off of bad debts of Rs. 1,70,64,819 in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. The assessee filed its original return of income electronically on 31-03-2018 for the assessment year 2017-18 declaring total income of Rs. 6,43,81,892 which was adjusted with the brought forward losses and disclosed book profit of Rs. 2,96,98,108 under section 115JB of the Act. The assessee is a private limited company engaged in the business of manufacturing of textiles, handloom and power looms. During the year under consideration, the learned AO noticed that assessee had disclosed irrecoverable balances written off amounting to Rs. 1,70,64,819 by debiting the same in the profit and loss account and claiming deduction for the same. When called for the details, the assessee did not furnish any details regarding the same. Accordingly, the learned AO for want of details proceeded to disallow the claim of bad debts written off in the assessment. This action of the learned AO was upheld by the learned CITA.

Before us, the learned AR submitted additional evidences by enclosing the copy of ledger accounts of parties with whom sale transactions were originally carried out and where the balances became irrecoverable and accordingly written off during the year under consideration. The Learned AR also filed these additional evidences along with the prayer for admission of those additional evidences in accordance with Rule 29 of the ITAT Rules. We find that these additional evidences go to the root of the matter and are relevant and crucial for adjudication of the issue in dispute before us and hence they are hereby admitted. However, the said additional evidences require factual verification by the Learned AO. Hence, the said additional evidences are restored to the file of learned AO for factual verification. Accordingly, the grounds raised by the assessee are allowed for statistical purposes by restoring to the file of learned AO for de novo

In the result, the appeal of the assessee is allowed for statistical purposes.