9911796707
TMI Blog1980 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... . The GTO held that the write off of the debt on 31st March, 1973 by the assessee amounted to deemed gift under s. 4(1)(c) of the GT Act. The AAC who first heard the appeal, held that the sum of Rs. 50,000 was not taxable to gift-tax. However on Revenue s further appeal the Tribunal (Madras Bench A ) by its order, dt. 11th May 1978. set aside the order of the AAC and restored the matter to his file to consider- (a) if the abandonment of debt by the assessee is not for a bona fide reason; (b) whether the unilateral act of the assessee in writing off the debt in the books of account constitute abandonment of the debt? and (c) if the assessee s son was still showing the debt in his wealth-tax return? 2. The successor AAC who heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to his capital account the assessee had ceased to have any right to the amount after the limitation had expired. There was no consultation between the parties in writing off the debt. He urged that it was; unable to recover the amount and due to the close relationship and the delicacy involved in the strict enforcement of collection of the amount and since any Court action would have strained the relationship with the son, the assessee had no alternative but to write off the debt. The ld. counsel also referred the following High Court decisions: (1) CGT vs. Abraham Kotchuthomman (1979) 98 ITR 394 (ker). (2) CGT vs. Padampat Singhania (1979) 117 ITR 323 (All). 4. In reply, the ld. Dept. Rep. supported the orders of the lower authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter year till 1967 was only because no legal steps could be taken for the recovery as the advances made become time barred. Only verbal requests were made to S from time to time for repayment but S kept the repayment in abeyance. Therefore, the assessee s only alternative was to write off the debt and even though the write off amounted to abandonment, it would not be a gift under s. 4(1)(c) of the GT Act because the entire write off was. 6. In the present case, even if it is taken that the assessee had relinquished the debt without taking steps for recovery because his son was involved, the bona fide of the write off is not in doubt since admittedly the assessee s son also stopped showing the item as liability from the asst. yr. 1973-74 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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