https://www.taxtmi.com/caselaws?id=64665 A debt may be allowed as a bad-debt deduction in the accounting year when the surrounding facts show it has become irrecoverable, including closure of the debtor's business, disappearance of the debtor, and unsuccessful recovery efforts. Pending arbitration does not by itself require deferral where the material already establishes that the debt has turned bad. Any later recovery of the amount would be taxable in the year of receipt under section 41(1) of the Income-tax Act, 1961. On these facts, the bad-debt claim was allowable in the year under consideration. en-us Wed, 30 Nov 1983 00:00:00 +0530 Wed, 09 Feb 2011 12:03:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=64665 A debt may be allowed as a bad-debt deduction in the accounting year when the surrounding facts show it has become irrecoverable, including closure of the debtor's business, disappearance of the debtor, and unsuccessful recovery efforts. Pending arbitration does not by itself require deferral where the material already establishes that the debt has turned bad. Any later recovery of the amount would be taxable in the year of receipt under section 41(1) of the Income-tax Act, 1961. On these facts, the bad-debt claim was allowable in the year under consideration. Case-Laws Income Tax Wed, 30 Nov 1983 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=64665