COMMISSIONER OF INCOME TAX DELHI IV vs. HEWITT ASSOCIATES (I) P.LTD.

ITA - 1332 / 2009HC Delhi10 December 20093 pages
For Petitioner: PC YADAV
AI SummaryDismissed

What did the High Court hold?

The Tribunal upheld the CIT(A)'s decision, finding that the assessee fulfilled the conditions for bad debt deduction under Section 36(1)(vii) read with Section 36(2) of the IT Act.

What were the facts?

The assessee wrote off certain debts as bad debts according to its global accounting policy. The Assessing Officer disallowed this deduction, but the CIT(A) found the write-offs were justified due to project delays, client disputes, and client delinquency.

What were the issues?

Whether the write-off of bad debts by the assessee was justified and allowable as a deduction under the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii),Section 36(2)

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## % 10.12.2009

Present: Mr.N.P.Sahni and Mr.P.C.Yadav, Advocates for the Appellant.

Mr.C.S.Aggarwal, Sr.Advocate with Mr.Prakash Kumar,

Advocate for the Respondent.

## + CM.APPL.No.17482/2009(for delay) in ITA No.1332/2009

Delay in re-filing the appeal is condoned. The application is disposed of.

## ITA No.1332/2009

The Revenue in this appeal is seeking to raise the following question:

"

1.

Whether the I.T.A.T. was correct in law in upholding the C.I.T. (Appeals) Order and confirming the deletion of addition of Rs.93,40,308/- made by the Assessing Officer on account of disallowance of deduction u/s. 36 (1) () (vii) of the Income Tax Act, 1961?"

The Respondent-Assessee had written off certain debts as bad debts as per the accounting policy of the Respondent which is followed globally. If the debt is not recoverable within 360 days it TA No.1332/2009

debts which were written off are related to the years 1997-1998 to 2000 – 2001. The Assessing Officer disallowed the same, however, the Commissioner of Income Tax (Appeals) went into the question and found that the bad debts had arisen on account of delay in completion of project,

The order continues below.

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