1960 (2) TMI 58 - HC - Income Tax

Summary

The High Court of Madras ruled in favor of the assessee, allowing a deduction of Rs. 6,125 as an irrecoverable bad debt under section 10(2)(xi) of the Act. The deduction was based on a fresh agreement between the parties, superseding the old contract, which rendered Rs. 6,125 irrecoverable. The genuineness of the transaction of 1949 was never in question, and the requirements of the section were satisfied. The Tribunal's decision was based on a wrong interpretation of section 9A of Act IV of 1938. The assessee is entitled to costs.