M/S TRIVENI PLENTY ENGG. LTD. vs. COMMISSIONER OF INCOME TAX

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ITA/740/2004HC DelhiDLHC01017228200427 April 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the claim for deduction of the debt written off was not permissible under Section 36(1)(vii) of the Income Tax Act, 1961. This was in line with the Explanation to Section 36(1)(vii) and Supreme Court judgments.

What were the facts?

The assessee claimed a deduction for a debt written off amounting to Rs. 2,94,217. The High Court was considering the appeal against the ITAT's order regarding this claim.

What were the issues?

Whether a debt written off, which had become irrecoverable and was reflected as income in earlier years, was allowable as a deduction under Section 36(1)(vii) of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii)

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$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI R-16 +

ITA 740/2004 TRIVENI PLENTY ENGG. LTD.

..... Appellant

Through None

versus

COMMISSIONER OF INCOME TAX

..... Respondent Through Mr. Zoheb Hossain, Sr. Standing Counsel

CORAM: JUSTICE S.MURALIDHAR JUSTICE CHANDER SHEKHAR

O R D E R %

27.04.2017

1.

None has appeared on behalf of the Appellant Assessee.

2.

While admitting this appeal filed by the Assessee against the order dated 29th April, 2004 passed by the ITAT in ITA No.3932/D/00 relating to the assessment year 1996-97, by order dated 21st November 2006, the Court framed the following questions for consideration: "i. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the claim of deduction of debt written off for Rs.2,94,217/- was not permissible under the provision of Section 36(1)(vii) of the Income Tax Act, 1961?

ii. Whether on the facts and in the circumstances of the case, bad debts which had become irrecoverable for Rs.2,94,217/- in the year

ITA 740/2004

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1996-97 was allowable as deduction under the provision of Section 36(1)(vii) of the Income Tax Act, 1961, particularly when the said amounts had already been booked and reflected as income in respect of earlier years to which they pertained.?"

3.

It is pointed out that in terms of the Explaination to Section 36 (1) (vii) of the Income Tax Act, 1961 the Assessee as inserted with effect from 1st April, 1989 and as interpreted by the Supreme Court in Southern Technologies Ltd. v. CIT (2010) 2 SCC 548 and Vijaya Bank v. Commissioner of Income Tax (2010) 5 SCC 416 both the questions are required to be answered in the affirmative i.e. in the favour of the Revenue and against the Assessee. It is ordered accordingly.

4.

The appeal is dismissed.

S.MURALIDHAR, J

CHANDER SHEKHAR, J APRIL 27, 2017 b

ITA 740/2004

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