Vantage Advertising private Limited, Chennai V. DCIT, Cir-12(2), Kolkata, Kolkata

ITA 23/KOL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4169 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 06-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: J P KHAITAN
• Keywords: Bad and doubtful debts; Provision of bad debts; Reassessment proceedings; TDS; Set aside
• Section: 133(6)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( . . , . . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM] I.T.A. NO. 23/KOL/2017 ASSESSMENT YEAR: 2010-11 VANTAGE ADVERTISING PVT. LTD. (PAN: AABCV1202B) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-12(2), KOLKATA. APPELLANT RESPONDENT FOR THE APPELLANT S/SHRI J. P. KHAITAN, SR. ADVOCAT E & PRATYUSH JHUNJHUNWALA, ADVOCATE FOR THE RESPONDENT DR. P. K. SRIHARI, CIT, DR DATE OF HEARING 09.12.2019 DATE OF PRONOUNCEMENT 26.02.2020 ORDER PER SHRI A.T.VARKEY, JM : THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF LD. CIT(A)-4, KOLKATA DATED 07.10.2016 FOR AY 2010-11. 2. GROUND NOS. 1 TO 4 OF ASSESSEES APPEAL IS AGAI NST THE ACTION OF LD. CIT(A) UPHOLDING THE DISALLOWANCE OF BAD DEBTS WRITTEN OFF OF RS.40,78,373/-. 3. BRIEFLY STATED FACTS AS OBSERVED BY AO ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 09.10.2010 DECLARING TOTAL INCOME OF RS.3 ,97,40,564/-. THE CASE WAS SCRUTINIZED BY DCIT, CIRCLE-12, KOL ON 06.03.2013 D ETERMINING TOTAL INCOME OF RS.18,27,37,175/- WHICH WAS REVISED AT RS.4,51,62,3 59/- U/S. 251/143(3) DATED 04.10.2013. SUBSEQUENTLY, THE PR. CIT, KOL-4, KOLK ATA IN HIS ORDER DATED 17.10.2014 POINTED OUT THAT THE ORDER ALREADY PASSED BY THE DC IT, CIRCLE-12, KOL ON 06.03.2013 WAS PREJUDICIAL TO THE INTEREST OF REVENUE TO THE E XTENT OF RS.40,78,373/- BEING THE ASSESSEES CLAIM FOR PROVISION OF DOUBTFUL DEBTS WH ICH WAS NOT EXAMINED BY AO WHILE PASSING THE ASSESSMENT ORDER ON 06.03.2013. ACCORD INGLY, THE LD. PR. CIT, KOL.-4, KOLKATA SET ASIDE THE ORDERS WITH THE DIRECTION TO RE-EXAMINE THE ISSUE AND COMPLETE THE ASSESSMENT AFTER PROPER EXAMINATION. 2 I.T.A. NO. 23/KOL/2017 VANTAGE ADVERTISING PVT. LTD. ASSESSMENT YEAR: 2010-1 1 4. SO, IN THE REASSESSMENT PROCEEDINGS PURSUANT TO LD. PR. CITS ORDER THE AO NOTED THAT THE ASSESSEE HAD CLAIMED PROVISION FOR DOUBTFUL DEBTS WRITTEN BACK AMOUNTING TO RS.71,25,039/-. THE AO OBSERVED FROM A PERUSAL OF THE SCHEDULE 15 OF AUDITED ACCOUNTS THAT THE ASSESSEE HAD CREDITED RS. 30,46,666/- AS PROVISION FOR DOUBTFUL DEBTS RETURNED BACK. SO, ACCORDING TO AO, THE BALANCE OF RS.71,25,039 RS.30,46,666 I.E. RS.40,78,373/- STILL REMAINS UNEX AMINED AND, THEREFORE, THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF ADDRES SES OF THE SUNDRY CREDITORS AND DETAIL STATEMENT IN RESPECT OF WHOM THE ASSESSEE CLAIMED B AD DEBTS/DOUBTFUL DEBTS TO THE TUNE OF RS.40,78,373/-. THE AO ACKNOWLEDGES THAT T HE ASSESSEE FURNISHED THE ADDRESSES OF THE ALLEGED CREDITORS DATED 04.08.2015 . HOWEVER, ACCORDING TO HIM, IN MOST OF THE CASES, THE FULL ADDRESSES WERE NOT GIVE N LIKE THE POSTAL INDEX NUMBERS (PINS). ACCORDINGLY, THE AO HAD TO COLLECT THE COM PLETE PINS FROM THE SYSTEM AND THEREAFTER NOTICES U/S. 133(6) OF THE ACT WERE ISSU ED TO THE SIX (6) PARTIES NAMED IN THE REASSESSMENT ORDER AT PAGES 1& 2. 5. HOWEVER, ACCORDING TO AO THE NOTICE U/S. 133(6) OF THE ACT COULD NOT BE SERVED UPON THE SIX (6) DEBTORS, SO HE ASKED THE ASSESSEE VIDE LETTER DATED 30.09.2015 TO SHOW CAUSE AS TO WHY THE DEBTORS BE TREATED AS BOGUS A S WELL AS INFORMED THE ASSESSEE THAT PURSUANT TO THE NOTICE U/S. 133(6) OF THE ACT, M/S. KINETIC ADVERTISING INDIA PVT. LTD. (PREVIOUSLY KNOWN AS M/S. PORTLAND INDIA OUTDOOR AD VERTISING PVT. LTD. COMPLIED BY LETTER DATED 11.09.2015) REVEALED THAT CLOSING DEBI T/CREDIT BALANCE IN THE NAME OF ASSESSEE COMPANY ENDING ON 31.03.2010 WAS NIL. HOW EVER, ACCORDING TO AO, THIS SCN OF AO DATED 30.09.2015 TO THE ASSESSEE, COULD N OT ELICIT ANY REPLY FROM ASSESSEE. THEREFORE, THE AO CONCLUDED THAT ASSESSEES CLAIM O F DEBITING (BAD/DOUBTFUL DEBTS) ARE INGENUINE/BOGUS AND DISALLOWED RS.40,78,373/-. AGG RIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THIS GRO UND OF APPEAL BY OBSERVING AS UNDER: 4.3. I HAVE CONSIDERED THE SUBMISSION OF THE ARS O F THE APPELLANT IN THE DISPUTED MATTER IN THE BACKDROP OF THE ASSESSMENT ORDER. I F IND THAT THE ISSUE RELATES TO CLAIM OF BAD DEBT WRITTEN OFF AMOUNTING TO RS.40,78,373/-. T HE APPELLANT HAS EXPLAINED THAT IT HAS FULFILLED THE CONDITIONS SPECIFIED IN SECTION 3 6(1)(VII) OF THE ACT AND THEREFORE ITS CLAIM SHOULD HAVE BEEN ALLOWED BY THE AO. IT HAS RE LIED UPON SEVERAL DECISIONS MORE PARTICULARLY THE APEX COURT'S DECISION IN THE CASE OF TRF LIMITED V. CIT (2010) 323 ITR 397 (SC) WHEREIN IT HAS BEEN HELD THAT IT IS NO T NECESSARY FOR THE ASSESSEE TO 3 I.T.A. NO. 23/KOL/2017 VANTAGE ADVERTISING PVT. LTD. ASSESSMENT YEAR: 2010-1 1 ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECO VERABLE AND THE ACCOUNTING ENTRY FOR WRITE OFF IS SUFFICIENT TO CLAIM THE DEDUCTION FOR BAD DEBTS. THE AR HAS ALSO RELIED UPON THE RECENT CIRCULAR OF CBDT ON 30.05.2016 IN RELATI ON TO THE LITIGATION ON THE ISSUE OF ALLOWABILITY OF BAD DEBT THAT IS WRITTEN OFF AS IRR ECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. I FIND THAT THE AO HAS CONSIDERED ALL THE SE SUBMISSIONS AND MADE ENQUIRIES TO VERIFY THE GENUINENESS OF DEBTORS WHICH WERE WRI TTEN OFF BY THE APPELLANT DURING THE YEAR, AS EITHER THEY HAD LEFT OR THEY WERE NOT KNOW N AT THE SPECIFIED ADDRESS. THUS THE GENUINENESS OF THESE DEBTORS ITSELF WAS NOT ESTABLI SHED BY THE APPELLANT. THE DECISION OF APEX COURT IN THE CASE OF TRF LTD MENTIONED HERE IN ABOVE AS WELL AS CIRCULAR OF THE CBDT ARE IN RESPECT OF GENUINE DEBTORS WHICH AR E JUST REQUIRED TO BE WRITTEN OFF IN THE ACCOUNTS AND ARE TO BE ALLOWED AS DEDUCTION. IN THE INSTANT CASE THE EXISTENCE OF DEBTORS ITSELF IS IN SERIOUS DOUBT SO THE DISALLOWA NCE MADE BY AO IS HELD TO BE JUSTIFIED. MOREOVER, THE AR HAS ALSO FAILED TO EXPL AIN WITH CORROBORATIVE EVIDENCE AS TO WHEN THESE BAD DEBTS WERE OFFERED AS INCOME OF T HE APPELLANT IN ANY OF THE PREVIOUS YEARS. IN ABSENCE OF THESE NECESSARY EVIDENCES IT C ANNOT BE SAID THAT THE APPELLANT HAS FULFILLED ALL THE CONDITIONS LAID DOWN IN SECTION 3 6(1)(VII) OF THE ACT. THESE GROUNDS ARE DISMISSED. AGGRIEVED, ASSESSEE IS BEFORE US. 6. HAVING HEARD BOTH THE PARTIES WE NOTE THAT ASSES SEE IS IN THE BUSINESS OF ADVERTISING AND HAD WRITTEN OFF AN AMOUNT OF RS.40, 47,791/- AGAINST IRRECOVERABLE DEBTS. THIS HAS BEEN REFLECTED FROM SCHEDULE-17 O F THE AUDITED FINANCIAL AT PAGE 106 OF PAPER BOOK, SINCE ACCORDING TO ASSESSEE, THI S BAD DEBT ACTUALLY WRITTEN OFF IN ITS BOOKS ARE IRRECOVERABLE IN THE ACCOUNTS OF THE ASSE SSEE FOR THE PREVIOUS YEAR AND, THEREFORE, CLAIMED DEDUCTION WHICH WAS DISALLOWED B Y THE AO/LD. CIT(A) ON THE REASON THE NOTICE SENT TO SIX (6) DEBTORS COULD NOT BE SERVED UPON THEM. SO, ACCORDING TO AO, THESE DEBTORS ARE BOGUS AND SO HE DISALLOWED THE CLAIM. 7. WE NOTE THAT THE LIST OF DEBTORS FROM WHOM RS.40 ,47,791/- COULD NOT BE RECOVERED BY THE ASSESSEE IS PLACED AT PAGE 125 AND 126 OF THE PAPER BOOK WHICH WE NOTE THAT THERE WERE FORTY ONE (41) DEBTORS WHOSE A DDRESSES WERE DULY FURNISHED BY THE ASSESSEE (IN SOME ADDRESS PIN WAS NOT THERE, WH ICH WAS GIVEN BY ASSESSEE LATER) AND OUT OF WHICH THE AO RANDOMLY SELECTED SIX (6) P ARTIES AND SENT NOTICES WHICH EVEN IF COULD NOT BE SERVED UPON THE ASSESSEE CANNOT BE THE SOLE REASON TO DISBELIEVE THE EXISTENCE OF THE ENTIRE DEBTORS AND BRAND THEM AS B OGUS, WHEN THE FACT REMAINS THAT THE ASSESSEE HAVE DULY TAKEN THIS AMOUNT (DEBT) INTO IT S ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE IN THE EARLIER PREVIOUS YEAR AND OF FERED TO TAX. A PERUSAL OF PAGE 125 CLEARLY GIVES THE FOLLOWING DETAILS (A) NAME OF FOR TY ONE (41) DEBTORS, (B) WRITE OFF AMOUNT YEAR OF RECOGNITION OF INCOME, (C) YEAR FOR CREATION OF PROVISION OF BAD DEBTS 4 I.T.A. NO. 23/KOL/2017 VANTAGE ADVERTISING PVT. LTD. ASSESSMENT YEAR: 2010-1 1 AND PAGE 126 GIVES THE ADDRESS OF FORTY ONE DEBTORS WHICH WERE GIVEN TO BOTH AO & LD. CIT(A). THUS, WE NOTE THAT THE AMOUNT ACTUALLY WRITTEN OFF IN THIS YEAR FROM THE FORTY ONE DEBTORS HAVE BEEN RECOGNIZED AS INCOME BY THE ASSESSEE IN THE EARLIER YEARS AND ACCEPTED BY THE DEPARTMENT IN THE EARLIER YEARS AND TAX WAS COMPUTED ACCORDINGLY. THEREAFTER, WHEN SIX OUT OF FORTY ONE DEBTOR WERE R ANDOMLY SELECTED BY THE AO TO ISSUE NOTICES WHICH WERE RETURNED/ELICITED NO REPLY , DOES NOT MEAN THAT THEY ARE BOGUS; AND ADVERSE INFERENCE AGAINST ASSESSEE COULD NOT HA VE BEEN DRAWN AGAINST ASSESSEE ON THE REPLY OF M/S. KINETIC ADVERTISING WITHOUT ALLOW ING THE ASSESSEE TO CROSS EXAMINE THEM. SO, WHEN THE ASSESSEE HAD OFFERED THE INCOME IN THE EARLIER YEARS FROM THESE DEBTORS, AND THE DEPARTMENT HAD ACCEPTED THE SAME ( PAGE 125 PAPER BOOK) THEN, MERELY BECAUSE THE NOTICE COULD NOT BE SERVED UPON THE RANDOMLY SELECTED SIX DEBTORS CANNOT BE A GROUND TO DISBELIEVE THE EXISTENCE OF A LL THE FORTY ONE DEBTORS, WHEN THE FACT REMAINS THE DEBTORS CAN CHANGE THEIR ADDRESSES . AND MOREOVER, WHEN THE DEBTORS COULD NOT BE FOUND IN THE ADDRESS WHICH THE ASSESSE E HAD WITH IT, IT GOES ON TO SHOW THAT THOSE DEBTORS COULD NOT BE TRACED FOR ENFORCIN G RECOVERY OF DEBTS. BE THAT AS IT MAY BE, LET US LOOK INTO THE LAW GOVERNING THE CLAI M MADE BY THE ASSESSEE. 8. AS PER THE PROVISIONS OF SECTION 36(1)(VII) OF T HE ACT WHICH DEALS WITH ALLOWABILITY OF BAD DEBT OR PART THEREOF. THE SAID SECTION, AS AMENDED W.E.F. 01.04.89, PROVIDES THAT THE FOLLOWING SHALL BE ALLOWED: SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF ANY BAD DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUN TS OF THE ASSESSEE FOR THE PREVIOUS YEAR. FROM THE PLAIN READING OF THE PROVISIONS OF SECTION 36(1)(VII) OF THE ACT, IT IS ABUNDANTLY CLEAR THAT FROM AY 1989-90 ONWARDS, THE PRECONDITIONS FOR ALLOWABILITY OF A DEBT IS THAT THE ASSESSEE SHOULD HAVE BONA FIDE B ELIEVE THAT THE DEBTS ARE NOT RECOVERABLE AND THAT THEY ARE WRITTEN OFF IN THE BO OKS OF ACCOUNTS. HENCE, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BTS BECOME BAD IN THE PREVIOUS YEAR UNDER CONSIDERATION FOR CLAIMING THE SAME AS DEDUCT ION. 9. AS PER SECTION 36(2)(I) OF THE ACT, IN ORDER TO CLAIM DEDUCTION UNDER SECTION 36(1)(VII) OF THE ACT, THE PRECONDITION IS THAT THE DEBT OR PART THEREOF SHOULD HAVE BEEN 5 I.T.A. NO. 23/KOL/2017 VANTAGE ADVERTISING PVT. LTD. ASSESSMENT YEAR: 2010-1 1 TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE A SSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WR ITTEN OFF OR OF AN EARLIER PREVIOUS YEARS. IN THIS CONNECTION, WE NOTE THAT THE ASSESSE E HAS ALREADY PROVIDED THE DETAILS OF THE YEAR IN WHICH THE REVENUE PERTAINING TO BAD DEB TS WERE OFFERED TO TAX BEFORE THE AUTHORITIES BELOW. WE ALSO NOTE THAT THE CENTRAL BO ARD OF DIRECT TAXES ('THE CBDT') VIDE CIRCULAR NO. 551 DATED 23 JANUARY 1990 HAS PRO VIDED THAT BAD DEBT WRITTEN OFF IS ALLOWED AS DEDUCTION IN THE YEAR IN WHICH IT IS WRI TTEN OFF AS IRRECOVERABLE IN THE ACCOUNT. THE RELEVANT EXTRACTS OF THE CIRCULAR IS P RODUCED BELOW FOR YOUR EASE OF REFERENCE: '6.6 THE OLD PROVISIONS OF CLAUSE (VII) OF SUB-SECT ION (1) READ WITH SUB-SECTION (2) OF THE SECTION LAID DOWN CONDITIONS NECESSARY FOR ALLO WABILITY OF BAD DEBTS. IT WAS PROVIDED THAT THE DEBT MUST BE ESTABLISHED TO HAVE BECOME BAD IN THE PREVIOUS YEAR. THIS LED TO ENORMOUS LITIGATION ON THE QUESTION OF ALLOWABILITY OF BAD DEBT IN A PARTICULAR YEAR, BECAUSE THE BAD DEBT WAS NOT NECES SARILY ALLOWED BY THE ASSESSING OFFICER IN THE YEAR IN WHICH THE SAME HAD BEEN WRIT TEN OFF ON THE GROUND THAT THE DEBT WAS NOT ESTABLISHED TO HAVE BECOME BAD IN THAT YEAR . IN ORDER TO ELIMINATE THE DISPUTES IN THE MATTER OF DETERMINING THE YEAR IN WHICH A BA D DEBT CAN BE ALLOWED AND ALSO TO RATIONALIZE THE PROVISIONS, THE AMENDING ACT, 1987, HAS AMENDED CLAUSE (VII) OF SUB- SECTION (1) AND CLAUSE (I) OF SUB-SECTION (2) OF TH E SECTION TO PROVIDE THAT THE CLAIM FOR BAD DEBT WILL BE ALLOWED IN THE YEAR IN WHICH SUCH A BAD DEBT HAS BEEN WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. 6.7 CLAUSES (III) AND (IV) OF SUB-SECTION (2) OF TH E SECTION PROVIDED FOR ALLOWING DEDUCTION FOR A BAD DEBT IN AN EARLIER OR LATER PRE VIOUS YEAR. IF THE INCOME-TAX OFFICER WAS SATISFIED THAT THE DEBT DID NOT BECOME BAD IN T HE YEAR IN WHICH IT WAS WRITTEN OFF BY THE ASSESSEE. THESE CLAUSES HAVE BECOME REDUNDAN T, AS THE BAD DEBTS ARE NOW BEING STRAIGHTAWAY ALLOWED IN THE YEAR OF WRITE OFF . THE AMENDING ACT, 1987 HAS, THEREFORE, AMENDED THESE CLAUSES TO WITHDRAW THEM A FTER THE ASSESSMENT YEAR 1988- 89. . 10. THEREFORE, WE NOTE THAT IT HAS FULFILLED THE TW O CONDITIONS FOR CLAIMING THE DEBTS WRITTEN OFF DURING THE YEAR UNDER CONSIDERATION AS BAD DEBT UNDER SECTION 36(1)(VII) OF THE ACT I.E. THE AMOUNT WAS SHOWN AS INCOME IN EARL IER YEARS AND THE AMOUNT HAS BEEN WRITTEN OFF IN THE ACCOUNTS FOR THE YEAR UNDER CONS IDERATION. HENCE, IN VIEW OF THE ABOVE CIRCULAR, THE ASSESSEE WOULD BE ENTITLED TO D EDUCTION OF THE IMPUGNED DAD DEBT WRITTEN OFF DURING THE YEAR UNDER CONSIDERATION. F URTHER, WE NOTE THAT THE ISSUE AS TO WHETHER THE ASSESSEE IS REQUIRED TO JUSTIFY THE WRI TING OFF THE DEBTS IN THE BOOKS OF ACCOUNTS AS BAD IN THE YEAR HAS NOW BEEN SETTLED AN D DECIDED BY THE DECISION OF THE SUPREME COURT IN THE CASE OF TRF LIMITED V. CIT (20 10) 323 ITR 397 (SC) WHEREIN IT HAS BEEN HELD THAT IT IS NOT NECESSARY FOR THE ASSE SSEE TO ESTABLISH THAT THE DEBT, IN FACT, 6 I.T.A. NO. 23/KOL/2017 VANTAGE ADVERTISING PVT. LTD. ASSESSMENT YEAR: 2010-1 1 HAS BECOME IRRECOVERABLE AND THE ACCOUNTING ENTRY F OR WRITE OFF IS SUFFICIENT TO CLAIM THE DEDUCTION FOR BAD DEBTS. THE HONBLE SUPREME CO URT HELD AS UNDER: IN THESE APPEALS, WE ARE CONCERNED WITH ASSESSMENT YEAR 1990-1991 AND ASSESSMENT YEAR 1993-1994. PRIOR TO 1ST APRIL, 1989, EVERY ASS ESSEE HAD TO ESTABLISH, AS A MATTER OF FACT, THAT THE DEBT ADVANCED BY THE ASSESSEE HAD , IN FACT, BECOME IRRECOVERABLE. THAT POSITION GOT ALTERED BY DELETION OF THE WORD ESTAB LISHED, WHICH EARLIER EXISTED IN SECTION 36(1)(VII) OF THE INCOME TAX ACT, 1961. FOR THE SAKE OF CLARITY, WE REPRODUCE HEREIN BELOW PROVISIONS OF SECTION 36(1)(VII) OF THE ACT, BOTH PRIOR TO 1 ST APRIL, 1989 AND POST 1 ST APRIL, 1989: 'PRE-1ST APRIL, 1989: OTHER DEDUCTIONS. 36.(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN, IN COMPU TING THE INCOME REFERRED TO IN SECTION 28- (I) TO (VI) XXXX XXXX XXXX (VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF ANY DEBT, OR PART THEREOF, WHICH IS ESTABLISHED TO HAVE BECOME A BAD DEBT IN THE PREVIOUS YEAR. POST-1ST APRIL, 1989: OTHER DEDUCTIONS. 36.(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN, IN COMPU TING THE INCOME REFERRED TO IN SECTION 28- (I) TO (VI) XXXX XXXX XXXX (VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), THE AMOUNT OF ANY BAD DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR .' 'THIS POSITION IN LAW IS WELL SETTLED. AFTER 1ST AP RIL 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, H AS BECOME IRRECOVERABLE. IT IS ENOUGH IF THE DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE.' 11. THEREFORE, IN THE LIGHT OF THE FACTS AND THE LA W AND THE HONBLE SUPREME COURT DECISION IN TRF LTD. (SUPRA), WE ARE OF THE CONSIDE RED OPINION THAT THE CLAIM OF BAD DEBT ACTUALLY WRITTEN OFF IN THE BOOKS OF THE ASSES SEE SHOULD BE ALLOWED AS DEDUCTION AND, THEREFORE, WE ALLOW THE APPEAL OF THE ASSESSEE . 7 I.T.A. NO. 23/KOL/2017 VANTAGE ADVERTISING PVT. LTD. ASSESSMENT YEAR: 2010-1 1 12. GROUND NO. 5 IS AGAINST THE ACTION OF THE LD. C IT(A) IN NOT ALLOWING THE CREDIT OF TDS AMOUNTING TO RS.2,12,475/- SHORT GRANTED BY THE AO. AFTER HEARING BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT THIS F ACTUAL ISSUE NEEDS TO BE VERIFIED BY AO AND IF THE CREDIT OF TDS HAS NOT BEEN GIVEN TO T HE ASSESSEE FOR RS.2,12,475/-, THEN IT SHOULD BE GIVEN IN ACCORDANCE TO LAW. WITH THIS DIRECTION TO AO, THIS GROUND OF APPEAL OF ASSESSEE IS DISPOSED OFF. 3. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 26TH FEBRU ARY, 2020. SD/ (A.L. SAINI) SD/-(A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26TH FEBRUARY, 2020 JD. SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. VANTAGE ADVERTISING PVT. LTD., C-5 6, FIRST AVENUE, ANNA NAGAR EAST, CHENNAI-600102. 2. RESPONDENT DCIT, CIRCLE-12(2), KOLKATA. 3. CIT(A)-4, KOLKATA. (SENT THROUGH E-MAIL) 4. CIT, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA. (SENT THROUGH E-MAIL) TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES