1976 (6) TMI 40

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....out the State of Kerala and the other State of the Union of India. Many persons from with the State and outside used to have their advertisements also published in these magazines. Various amounts were due from these categories of distributors, agents and advertisers to Radha Printers. The entire business activity of Radha printers as regards there two magazines was taken over by the assessee firm as a going concern with all assets and liabilities. So the assessee became its successor. That is, it took over these debts due from those third parties to the assessee's predecessor, Radha Printers. 2. In the year of account, the assessee claimed such bad debts to the extent of Rs. 57,061. But latter in the return it added back Rs. 40,689 on t....

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....e money is due. Some of them are agents for both. Some are only for one magazine. Most of the amounts due are small amounts. According to the assessee, the agents are small pan-wallas or small bank-owners that we see in many towns and petty traders who initially pay some security and to whom these journals are despatched on credit. It is they, who undertake the work of distribution. The cost of magazines supplied will generally be more than the deposit amount. After sale, those people remit the money to the assessee. Some of them fail to do it. Hence the occasion for bad debts. The amounts due and claimed as bad debts are after adjusting the security amount, if any deposited by these agents. These amounts have been written off in the profit....

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....to pay their dues. It seems to be all some mushroom companies of persons with small business activity. The amounts due from them are also small amounts. It is not worthwhile to institute civil Court proceedings, and establish to the hilt that nothing is recoverable. All that will be waste of time and waste of money for businessman placed in these circumstances. With a close understanding of the nature of business activity of distribution of these Malayalam journals and the standard of these journals, if one where to view the matters about recovery of these amounts objectively, it would become clear to everyone that all these amounts had become irrecoverable and that there is no use in waiting any further in the hope of realisation of these ....