TRF LTD. vs COMMNR. OF INCOME TAX

The Supreme Court interpreted Section 36(1)(vii) of the Income Tax Act, 1961, clarifying that post-1st April 1989, it is sufficient for an assessee to write off a bad debt as irrecoverable in their accounts without needing to establish its irrecoverability. The Court held that the Assessing Officer must verify whether the debt was indeed written off in the accounts, remitting the matter for de novo consideration. The civil appeals were disposed of with no order as to costs.