https://www.taxtmi.com/caselaws?id=182802 Deduction of bad debts is allowable only in the accounting year in which the debt is shown on evidence to have actually become irrecoverable. An objective inquiry is required, supported by material indicating that recovery had become impossible or improbable during that year. A debt that became bad before the relevant year cannot be deducted in a later year, but the assessee is entitled to the deduction if the loss crystallised during the year claimed. The Tribunal's contrary finding was held unsupported by evidence and based on an erroneous focus on the timing of the write-off. The disallowance was therefore unsustainable. en-us Fri, 24 Jun 1966 00:00:00 +0530 Thu, 19 May 2016 18:09:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=182802 Deduction of bad debts is allowable only in the accounting year in which the debt is shown on evidence to have actually become irrecoverable. An objective inquiry is required, supported by material indicating that recovery had become impossible or improbable during that year. A debt that became bad before the relevant year cannot be deducted in a later year, but the assessee is entitled to the deduction if the loss crystallised during the year claimed. The Tribunal's contrary finding was held unsupported by evidence and based on an erroneous focus on the timing of the write-off. The disallowance was therefore unsustainable. Case-Laws Income Tax Fri, 24 Jun 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=182802