https://www.taxtmi.com/caselaws?id=12159 A taxpayer may claim deduction for bad debts written off where contemporaneous material shows the debt had become genuinely irrecoverable in the year of write-off. Here, no payments had been received for several years, representations to the Central Government had been rejected, and the takeover regime restricted winding-up or appointment of a receiver without governmental consent. Applying the prudent businessman standard, the Court found recovery was not realistically possible and that consent for recovery proceedings would not have been granted. Failure to institute formal proceedings was not decisive because the material established no real prospect of recovery. The assessee was therefore entitled to treat the amounts as bad debts and the disallowance could not stand. en-us Thu, 21 Nov 2002 00:00:00 +0530 Thu, 18 Feb 2010 12:43:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=12159 A taxpayer may claim deduction for bad debts written off where contemporaneous material shows the debt had become genuinely irrecoverable in the year of write-off. Here, no payments had been received for several years, representations to the Central Government had been rejected, and the takeover regime restricted winding-up or appointment of a receiver without governmental consent. Applying the prudent businessman standard, the Court found recovery was not realistically possible and that consent for recovery proceedings would not have been granted. Failure to institute formal proceedings was not decisive because the material established no real prospect of recovery. The assessee was therefore entitled to treat the amounts as bad debts and the disallowance could not stand. Case-Laws Income Tax Thu, 21 Nov 2002 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=12159