2001 (8) TMI 74

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....s not an allowable deduction in the computation of income from business? 2. Whether, the finding of the Tribunal that the debt of Rs.2,42,006 relating to Shalimar Works Ltd. had become bad and irrecoverable during the previous year is based on any wrong principle of law or ignoring the relevant materials?" In compliance with the direction the aforesaid questions are referred for our opinion with the statement of the case. The relevant assessment year is 1981-82. During the course of assessment, the Assessing Officer noticed that a sum of Rs.2,42,006 was due from Shalimar Works Ltd. and the assessee had written off that amount and claimed it as bad debt in this year. The Assessing Officer has rejected the claim of the assessee. Acco....

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....ubmissions of both the parties and are inclined to agree with the learned Departmental Representative that the assessee has not brought any material to show that the debt has become bad. It is not clear whether the assessee has filed the claim before the official liquidator at all and if at all filed, the results thereof. The amount paid by the Government on taking over Shalimar Works Ltd. is also not made available to us. Similarly, the quantum of secured creditors and unsecured creditors is also not available. Therefore, in view of these facts, we hold that debt has been written off prematurely and without taking any steps for its recovery. Hence, we hold that the Commissioner of Income-tax (Appeals) is not justified in deleting the same ....