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The impugned order passed by the Income Tax Appellate Tribunal is modified and the finding that the assessee is entitled to the benefit of capital loss is set aside.

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Sec. 36, 46, 74 of Income Tax Act, 1961 - Business Expenditure - The return of assessee declaring loss was processed under Section 143(1) of the Act. The AO disallowed a sum of Rs. 32,25,000/- on the ground that no particulars were furnished. CIT(A) upheld the disallowance in respect of writing off the debts. Tribunal in the appeal of the assessee held that writing off bad debt as irrecoverable in the accounts of the assessee is sufficient in view of law laid down by Supreme Court in ‘T.R.F LTD. VS. CIT’, 323 ITR 397 and the assessee was entitled to write off an amount of Rs. 3,50,81,381/- as bad debt. It was also held that the aforesaid amount should be treated as capital loss under Section 46(2) of the Act. On the appeal of the Revenue, High Court held that “the tribunal has not recorded a specific finding by assigning reasons that in the books of account the debts have been written off. Only in a single sentence, it is stated that the assessee had in its books of account written off its debt as irrecoverable”. Accordingly, the impugned order passed by the Tribunal is modified and the finding that the assessee is entitled to the benefit of capital loss is set aside. Remitted the matter to the assessing officer.—CIT vs. ABB LTD.[2020] 26 ITCD Online 039 (KARN)