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TMI Blog1966 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting year was the year ending December 31, 1958? The assessee-company, namely, the United Industrial Corporation (Agencies) Private Ltd., Hyderabad, was doing business in importing machinery, etc. It was maintaining accounts in mercantile system. Messrs. Chinoy Challani and Co. (hereinafter referred to as the debtor) cleared certain goods and sent them to the Indian Steel and Wire-products Limited and to another party at the instance of the assessee. A sum of Rs. 11,299-6-8 became due from the debtor to the assessee as on February 10, 1948. Subsequently, the assessee received Rs. 2,725-11-4 from the debtor on December 31, 1953. The assessee issued a lawyer's notice dated January 19, 1954 (exhibit A), demanding payment of Rs. 15,887-1-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims between yourself and ourselves in respect of this transaction". The assessee made an entry of this cash payment of Rs. 249-4-4 against the debtor in his (assessee's) account and closed the debtor's account by crediting a sum of Rs. 8,324-7-1 on December 31, 1958, as " amount written off as bad debts ". He also debited this amount to the assessee's profit and loss account for the year ending December 31, 1958, and claimed it as a deduction for the assessment year 1959-60. The Income-tax Officer disallowed the assessee's claim of bad debt on the ground that no action had been taken by the assessee by way of filing a suit and that the debt had already become time-barred even before December 31, 1958. On appeal, the Appellate Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding December 31, 1958, and that the Tribunal erred in acting on the three main grounds mentioned by us above. The main questions concerned in this case are : (1) Whether the debt concerned is a bad debt ? and (2) If so, at what point of time, it became a bad debt ? In fact, the Appellate Assistant Commissioner and the Tribunal have held that the debt was a bad debt and that it became bad during the relevant accounting year ending December 31, 1958, only to the extent of Rs. 1,000 and that the rest of it had become bad even prior to that accounting year. Shri C. Kondaiah contends that both these questions are questions of fact and, consequently, there is no question of law arising in this case. The relevant portion of section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt ; still less will it fix the date at which it became a bad debt. A statute-barred debt is not necessarily bad ; neither is a debt which is not statute barred necessarily good. The age of the debt is no doubt a relevant matter to take into consideration. In every case it is a question of fact to be determined after consideration of all relevant circumstances. This passage is extracted with approval by their Lordships of the Supreme Court in Bank of Bihar Ltd. v. Commissioner of Income-tax with the following observation : " It is true that at the material time when this case was decided, the Act contained no provision such as section 10(2)(xi) authorising deductions of bad debts of business, but it was held that such a deduction was ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces the Tribunal came to the conclusion that the debt had become irrecoverable in Samvat 1990. It is not for us to consider whether, on the same facts, we would have come to the same or to a different conclusion. All that we are entitled to see is whether there was material on which the Tribunal could come to the conclusion arrived at by it. We fail to see how it can be said, in view of the facts and circumstances detailed in the appellate order of the Tribunal, that there was no material for the finding arrived at by it. " In the present case also, the Tribunal has considered all the relevant documents including exhibit A-2 and exhibit A-3 and arrived at its conclusion and given its finding on the relevant questions of fact. We do not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, was really one of fact depending upon congeries of facts and diverse circumstances but they proceeded to consider the arguments on this question and finally held that the Tribunal had reached the correct conclusion after consideration of the facts. The question as to whether, on the finding of fact, the court would interfere on a reference under section 66(2) was not raised and considered in that case. This decision does not affect the principle already mentioned by us above regarding interference by this court on questions of fact in a reference under section 66(2) of the Act. We, therefore, answer the question in the negative and in favour of the department with costs. Advocate's fee Rs. 150 (rupees one hundred and fifty). Question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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