The Assessing Officer made a total disallowance of Rs.3,16,35,781 on account of contractual provisions, comprising Rs.2,19,99,037 towards bad debts written off and Rs.1,08,77,906 towards DLP expenditure. It also relied on T.R.F Limited vs. CIT concerning write-off of bad debts under Section 36(1)(vii). CIT(A) was justified in allowing the assessee’s claim of bad debts written off totaling to Rs. Since these amounts cannot be recovered from the relevant debtors, assessee has written them off as bad debts in the year under consideration. Accounting Treatment at the of occurrence of bad debtsParticulars Debit Credit Bad Debts A/c … Dr 46,06,601 To Power Grid Corporation of India Ltd. A/c… 46,06,601—Particulars Debit Credit Profit & Loss A/c … Dr 46,06,601 To Bad Debts A/c … 46,06,601Occurrence of actual bad debts of INR 46,06,601 out of total receivable of INR 59,29,386A bifurcation payment / bad debts vis a vis Revenue:Particulars Date Amount (In INR) Receipt 30-Apr-13 6,99,788 Receipt 01-Jun-16 6,22,996 Credit Memo (Amount not received from Power Grid Corporation of India Ltd.) 15-Dec-17 46,06,601 Total 59,29,386Actual receipt amounting to INR 13,22,784 (INR 6,99,788 plus 6,22,996) and occurrence of bad debts amounting to INR 46,06,601.