Can a ito can make addition during scrutiny assessment proce

Dear Akaksha,

Yes, he can make the addition to the income by disallowing the bad debts provisioning. There is no bar on him doing so.

However, you can argue for your case and try to explain to him that this is not correct and that you are making efforts to recover the same, but the same are not fruitful and thus, have written off the said debtors.

- Ankit

Sir,

We have not written any bad debts till date. however, as you told our debtors are old outstanding and out of business cycle. Please reply on these points.

If the amount of debtors written off as bad debt were earlier offered to income in earlier years then write off by the Assessee of the said debtors as bad debt will be allowable as deduction to the Assessee. The same is also held by the SC in the decision of TRF. Hence on above facts, AO cannot add back the debtors written off.
 

Regards

Bhavin Sir,

We have not written off any debtors in current years or earlier years but our A.O. is saying us that he will make addition due to old trade debtors

He cannot do that addition.

Thank you sir

Dear Friend, U have to write off your debtor in the books of Accounts first. 

No; I do not think that addition can be made on account of old  debtors in the current A Y; per se. Moreover he has to prove that the transactions were false/bogus when they happened  and the implications will be in the relevant assessmnet years. These kind of issues arise in case of bogus purchase/sales transactions and involve the matters of unaccounted investment; unaccounted expenses and estimated GP and mostly when the Department receives information consequent to a Search or Survey.