Orange Business Services India Technology Private Limited vs. DCIT, Circle 3(1), Gurgaon

Parties Involved

Facts Summary

The assessee company is engaged in selling and installing telecom equipment. During the year under consideration, the assessee company had written off certain debts as bad debts in its audited books of account after the same became irrecoverable. While passing the assessment order for the captioned assessment year, the Assessing Officer (AO) proceeded to disallow the claim of Rs. 2,69,26,319/- towards bad debts written off. Aggrieved by the order of the AO, the assessee company preferred an appeal before the Commissioner of Income-tax (Appeals) (CIT(A)). Upon the assessee's appeal, the CIT(A) confirmed the AO's action by holding that it is obligatory upon the assessee to prove to the AO that the case satisfies the ingredients of section 36(1)(vii) and 36(2) of the Act. Aggrieved with the aforesaid order of the CIT(A), the assessee is in appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the orders passed by the Learned Assessing Officer and upheld by the Learned Commissioner of Income-tax (Appeals) are erroneous and bad in law.
• 2. Whether the assessment framed is void-ab-initio and nullity in eyes of law as it was initiated beyond the prescribed timeline.
• 3. Whether the Learned Assessing Officer/CIT(A) grossly erred in recording factually incorrect findings towards disallowance of INR 2,69,26,319 on account of bad debts written off.
• 4. Whether the Learned Assessing Officer/CIT(A) grossly erred in making the disallowance of INR 2,69,26,319 towards bad debts written off which is otherwise allowable under section 36(1)(vii) r.w.s. 36(2) of the Act.
• 5. Whether the Learned Assessing Officer/CIT(A) ought to have allowed the claim of bad debts of INR 2,69,26,319 written off as irrecoverable once the condition prescribed conditions under section 36(1)(vii) r.w.s. 36(2) are fulfilled.
• 6. Whether the Learned Assessing Officer erred in charging interest under sections 234B and 234D of the Act and recovery of interest under section 244A of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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