1982 (9) TMI 81

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 6,000 (f) Sterling General Insurance Co. 15,959 2,75,636 The ITO found that all these advances, except in the case of Sterling General Insurance Co., related to cash credit limits allowed by the assessee bank. He has given some what sketchy history of these debts in the assessment order. He found that practically in all the cases, the assessee had either filed suits for recovery or some criminal or insolvency proceedings were pending before some court of law. He was of the view that in view of the pendency of these cases it could not be held that the debts had become bad in the year under appeal. He, therefore, treated them as premature and disallowed the assessee's claim for deduction from its profits. Hi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed that when the assessee was successful in proving these facts then alone it was entitled to the deduction of the debts u/s of the Act. 3. The debt due from Sterling General Insurance Company arose in some what different circumstances. The facts of this matter have been given in detail in the order of the CIT (A) and need not be repeated here. It was not disputed before us that the debt had become bad or irrecoverable on the pronouncement of the decision of the Supreme Court after the parties had compromised. The decision of the Supreme Court was given on 25th February, 1972. The case of the assessee is that it had received the order of the Supreme Court only in 1973 and, therefore, the amount due from the Sterling General Insurance Com .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... held in the light of the principle laid down by the Bombay High Court as quoted by us above. 5. The question for consideration which now survives is whether the debts had actually became bad in the year under appeal. We are of the opinion that the material on record is not sufficient for us to take a decision in this matter either way. It was not denied before us that the assessee had entered into agreements with various constituents for granting them cash credit limits. It is necessary to examine these agreements to find out whether any security had been offered to the assessee against such limits. It will then be necessary to see whether those securities had been exploited by the assessee and whether there was any further amount yet to .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X