sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

May, 22nd 2013
%                                      Judgment delivered on: 09.04.2013

+       ITA No. 209/2013

COMMISSIONER OF INCOME TAX-VI                                  ... Appellant


TIMES BUSINESS SOLUTION LTD.                                   ... Respondent

Advocates who appeared in this case:
For the Appellant            : Mr Sanjeev Rajpal
For the Respondent           : None




1.      This appeal by the revenue is directed against the order of Income
Tax Appellate Tribunal dated 31.08.2012 in ITA No. 629/Del/2012
pertaining to the assessment year 2007-08. The assessing officer had
disallowed a sum of `. 3,63,31,532/- which had been shown by the
assessee as bad debts written off.

2.      The assessee company, consequent upon a scheme of demerger
under section 391 to 394 of the Companies Act, 1956, had acquired all

ITA 209/2013                                                         Page 1 of 4
the assets and liabilities of two web based portals that were hitherto being
operated by the assessee's holding company. Those web based portals
were acquired as going concerns. Shareholders of the holding company
were issued shares in the assessee company pursuant to the demerger.
The assessee thereafter continued to run and operate the two web portals
and derived income by way of online services, co-branded income,
advertisements and management of events. In the very first year of
operation, after the said demerger, the assessee company had written off
bad debts amounting to `. 3,63,31,432/- in its books. According to the
assessing officer these debts related to the years 2003 to 2006 when the
web portals were run and operated by the holding company and that the
assessee could not have written off the bad debts as such act contravened
section 36(1)(vii) of the Income-tax Act, 1961. Consequently, he rejected
the claim in respect of the bad debts written off.

3.      Thereupon, the assessee filed an appeal before the Commissioner
of Income Tax (Appeals) who, following the decision of the Supreme
Court in the case of CIT v. Veerabhadra Rao: 155 ITR 152 (SC), held
that the assesse was entitled to write off the irrecoverable bad debts
although, the said debts had been acquired from the holding company.
The Supreme Court in the said decision in the case of Veerabhadra Rao
(supra) observed that if a business, along with its assets and liabilities, is
transferred by one owner to another, there was no reason as to why the
debts so transferred should not be entitled to the same treatment in the
hands of the successors. It is clear that the Supreme Court held that when
the original owner would have been entitled to write off the bad debts, the

ITA 209/2013                                                       Page 2 of 4
successor who acquires the assets and liabilities from the previous owner
would also be entitled to treat the bad debts in the same manner in which
the original owner was entitled under law.               Consequently, the
Commissioner of Income Tax (Appeals), following the decision of the
Supreme Court in the case of Veerabhadra Rao (supra) allowed the
appeal of the assessee and permitted the assessee to write off the bad

4.       Before the Commissioner of Income Tax (Appeals) a point was
also raised by the revenue that there must be some evidence to show that
the debts had in fact become bad. A similar argument was also sought to
be raised by the learned counsel for the revenue before us. However, we
find that the Commissioner of Income Tax (Appeals) has adequately
addressed this issue by placing reliance on the Supreme Court decision in
the case of T.R.F. Limited v. CIT: 323 ITR 397(SC) wherein the
Supreme Court clearly held that after the amendment which took effect
from 01.04. 1989, it was not necessary for the assessee to establish that a
debt, in fact, had become irrecoverable. The Supreme Court further
observed that it was enough if the bad debts were written off as
irrecoverable in the accounts of the assessee. There is no dispute about
this fact insofar as the present case is concerned. The assessee had
written off the debts in question as irrecoverable in its accounts.

5.       The Income Tax Appellate Tribunal has merely confirmed the
decision of the Commissioner of Income Tax (Appeals). We find no
infirmity in the decision of the Commissioner of Income Tax (Appeals)

ITA 209/2013                                                          Page 3 of 4
or in the decision of the Tribunal. No question of law, what to speak of
substantial question of law, arises for our consideration.

6.      The appeal is dismissed.

                                        BADAR DURREZ AHMED, J

                                                R.V.EASWAR, J
APRIL 09, 2013

ITA 209/2013                                                  Page 4 of 4
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Portal Design Website Design Portal Designing Website Designing Web Design Professional Portal Design Professional Website Design Professional Web Design Portal Design India Website Design India Portal Designing India Website Designing India Web Design India Professional Portal Design India Professional Website Design India Chicago Professional Web Design New York Professional Web Design California Website Design Florida Website Design New Jersey Website Design Britain UK Website Design London Manchester Website Design

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions