Amendment to Section 36(1)(vii) of IT Act

[janakmalvi]

On the issue of whether a taxpayer, while claiming deduction of bad debts in its return of income, is required to establish that the debts have, in fact, become irrecoverable. The SC held that post the amendment to Section 36(1)(vii) of the Indian Tax Law , for claiming deduction of bad debts, it is sufficient that the debt is written off in the books of account as bad debt. It is not necessary for the taxpayer to establish that the debt has become irrecoverable. Established in recent ruling of the Supreme Court in the case of TRF Ltd.