provision created for bad
and doubtful debts. Further, in order to qualify for
deduction of the bad debt written off, the
requirement of section ... have become a
bad debt in that year;
(iv) Where any such debt or part of debt is written
off as irrecoverable in the accounts
bad debts and provisions for bad and doubtful debts and bad debt dividend, the learned author has mentioned :
"37. In business sometimes debts become ... Bad Debts provision 125 2,375
------
Instead of
Sundry Debtors 2,560
Less Bad Debts provision 128 2,432
When the Bad Debts are written
given only when a bad debt was written off and not when the good debt written off. For this proposition, he also relied ... that a claim of bad debt will be allowed in the year in which such bad debt has been written off as irrecoverable
nature of debts, why said debts have been
considered as bad and the evidence that the said debts have been actually written off as
irrecoverable ... assessee to establish that the debt has
become bad and it would suffice if the debts are merely written off in the books as bad
respect of rural debts whereas in Section 36(1)(vii) , any irrecoverable bad debts actually written off can be claimed as deduction by the assessee ... provision for bad and doubtful debts and see as to whether the amount of bad debts actually written of exceeds such credit balance, whereas
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 ... have become a bad debt in that year;
(iv) where any such debt or part of debt is written off as irrecoverable in the accounts
provision made for bad and doubtful debts has to be added
back to the net profit. The bad debts written off ought to have been ... claimed deduction of provision for bad debts but there was a claim of
deduction of bad debts actually written off, to the tune
perused the material on
record. The bad debts written off is allowable to the extent of written off in
books of accounts as held ... assessee has made only provision for
doubtful debt and debt has not been written off as bad in its books of
accounts. Further, in note
provision for bad and doubtful loans".
7. The AO vide order dated 26.02.1999 disallowed deduction for
bad debts written off amounting ... being provision
for bad and doubtful debts allowable under Section
36(1)(vii) of the Act against bad debts written off.
9. The Tribunal reversed
provision for bad and doubtful debts account made under Clause (viia), and that in respect of other bad debts written off, the entire amount ... entire bad debt established as such up to April 1, 1987, and thereafter the entire bad debt written off in the books of account under
