Bad debt treatment depends on factual irrecoverability, not on whether the debtor company has been wound up.

Recoverability of a debt, including one owed by a company still carrying on business, is a question of fact to be determined on the evidence in each case. No rule of law requires the company to be wound up or to have ceased as a going concern before the debt can be treated as bad. The existence of an ongoing company does not, by itself, prevent a creditor from establishing that the debt has in fact become irrecoverable.

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Issues: Whether money due by a joint stock company can be treated as a bad debt or business loss in the creditor's hands only if the company has been actually wound up or has ceased to be a going concern.

Analysis: The question whether a debt is wholly or partly irrecoverable is one of fact to be determined on the relevant evidence in each case, regardless of whether the debtor is an individual or a company. No general rule of law supports the view that a debt owed by a company which is still carrying on business cannot be regarded as a bad debt. The existence of the company as a going concern does not, by itself, prevent examination of whether the debt has in fact become bad.

Conclusion: The debt could be treated as a bad debt without proof that the company had been wound up or had ceased to be a going concern.

Final Conclusion: The appeal succeeded, the High Court's answer to the reference was set aside, and the assessment and deduction claim were to be reconsidered on the evidence.

Ratio Decidendi: The recoverability of a debt, including one owed by a company still carrying on business, is a question of fact on the evidence, and no rule of law requires winding up or cessation of business before the debt can be regarded as bad.

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