ITA No. 878/Del/2022

Parties Involved

Facts Summary

The appeal in ITA No. 878/Del/2022 for AY 2013-14, arises out of the order of the Commissioner of Income Tax (Appeals)-23, New Delhi against the order of assessment passed by the Assessing Officer, DCIT, Circle-23(1), New Delhi. The revenue raised grounds that the order of the Ld. CIT(A) is not correct in law and on facts. The assessee company, engaged in the business of investment in securities and providing loan and other credit facilities, claimed a bad debt of Rs. 13,52,70,429/- as deduction in the return of income. The assessee explained that Indiabulls Financial Services Ltd (IBFSL) originally advanced loans to three parties, which were taken over by the assessee company on an assignment basis. The assessee company claimed that the irrecoverability of the loan amounts resulted in a loss of its stock in trade, construing it as a business loss eligible for deduction u/s 36(1)(vii) of the Act as bad debts. However, the Assessing Officer disallowed the claim of bad debt. The ld CIT(A) deleted the disallowance made on account of bad debts written off, observing that all conditions were duly satisfied by the assessee. The revenue appealed against this order.…

Legal Issues

• 1. Whether the order of the Ld. CIT(A) is correct in law and on facts.
• 2. Whether the assessee is entitled to claim deduction for bad debts.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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