For the sake of ready reference, section 36(1)(vii), along with the proviso and the Explanation thereto are reproduced as follows : It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee.Īs per the present provisions of section 36(1)(vii), however, it will also be necessary to take into consideration the Explanation to section 36(1)(vii), as also the provisions of section 36(2) of the Act. (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”įrom the aforesaid provisions of section 36(1)(vii), it may be seen that after, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. (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.”Īfter the aforesaid amendment, section 36(1)(vii) reads as follows: (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28. Before the aforesaid amendment, section 36(1)(vii) read as follows: Section 36(1)(vii) was amended by the Direct Tax Laws (Amendment) Act, 1987, with effect from. CIT 323 ITR 166 (SC).Įarlier, the provisions of section 36(1)(vii) were also considered by the Apex Court, in the case of S outhern Technologies Ltd. The aforesaid judgements are as follows : Recently the Apex Court has rendered two very significant judgements in relation of the write-off of bad debt in the books of account of an assessee for the purpose of deduction thereof, under the provisions of section 36(1)(vii) of the Income-Tax Act, 1961 (the Act), r.w.s.36(2) of the Act.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |