Limitation cannot defeat a deduction claim when the supporting civil decree arose after the limitation period and merits review was required.

A deduction claim based on a debt later decreed by a civil court could not be defeated on a technical limitation objection where the decree itself arose after the ordinary limitation period and could not have been produced earlier. The Court treated the matter as part of compliance with its earlier direction and held that the revenue authority had to examine the application on merits rather than refuse it under the limitation bar. The impugned order was quashed and the authority was directed to reconsider the claim for deduction in accordance with law.

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Issues: Whether the assessee's application for deduction of a debt decreed after expiry of the limitation period could be refused on the ground of bar of limitation, and whether the assessment order should be quashed with a direction to consider the request on merits.

Analysis: The debt in question was later decreed by a civil court, establishing the assessee's entitlement to deduction. The fact that the decree came into existence after five years from the assessment order meant that the assessee could not have produced the decree within the limitation period. In such circumstances, a technical objection based on limitation was held to be unjustified. The Court also treated the request as falling within the scope of compliance with its earlier direction and not as a mere application to be defeated by the limitation bar under section 61.

Conclusion: The objection based on limitation was rejected, the impugned order was quashed, and the Assistant Controller was directed to consider the assessee's application on merits without raising the bar of limitation.

Final Conclusion: The assessee was granted substantive relief and the revenue authority was required to reconsider the claim for deduction in accordance with law.

Ratio Decidendi: Where entitlement to a deduction arises only after a decree is passed beyond the ordinary limitation period, the authority should not defeat the claim on a technical limitation plea and must consider the application on its merits.

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