Bad debts need not be proven to be irrecoverable u/s 36(1)(vii). It is sufficient if they are written off

TRF Limited vs. CIT (Supreme Court)
Bad debts need not be proven to be irrecoverable u/s 36(1)(vii). It is sufficient if they are written off



The Supreme Court had to consider whether after the amendment to s. 36 (1) (vii) w.e.f. 1.4.1989, an assessee had to establish, as a matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable or whether writing off the debt as irrecoverable in the accounts was sufficient. HELD deciding in favour of the assessee: