Bad debt deduction turns on the year irrecoverability arises, and later account adjustments cannot revive an already bad debt.

A debt is deductible as a bad debt only in the year in which it in fact became irrecoverable, and that question is one of fact. The evidence showed that the debts relating to B.I.G. Co. and Fulchand Srinarain had become bad in 1947, because the accounts had not been operated since 1946 and the firms were then unable to pay. A later unilateral amalgamation of those debts with another recoverable account could not revive them for deduction in a later assessment year. Where the Tribunal's finding on bad debt is supported by evidence, the High Court cannot reappreciate that evidence in reference proceedings under section 66.

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Issues: Whether the amount written off by the assessee could be treated as a bad debt in the assessment year 1950-51, or whether the debt had already become bad in 1947 and therefore was not deductible in the later year.

Analysis: The finding that the debts relating to B. I. G. Co. and Fulchand Srinarain had become irrecoverable in 1947 was supported by evidence. The accounts had not been operated since 1946, the firms were not in a position to pay in 1947, and the subsequent unilateral amalgamation of those debts with another recoverable account could not revive debts that had already become bad. The question when a debt becomes a bad debt is one of fact, and where there is evidence supporting the Tribunal's conclusion, the High Court cannot reappreciate that evidence in a reference under section 66.

Conclusion: The claim for deduction of the disputed amount as a bad debt in 1949 was rightly disallowed, and the appeal failed.

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