1985 (8) TMI 89

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....nting following calendar year. The relevant facts as per the letter by the assessee to the AAC are extracted below: "In the instant case, in computing total income for the asst. yr. 1978-79, the assessee had claimed a deduction in respect of bad debt amounting to Rs. 57,018 which was actually written off in the books of a/c. of the relevant previous year, as the same was found irrecoverable. The said claim was, however, negatived by the ld. ITO. From the facts of the case as already explained before the ITO in the assessment proceedings, vide the assessee's letter dt. 25th Sept., 1978, it can be seen that, when in December, 1975, one of the customers, namely Mr. Azam Mohmed Matiya came to the assessee and intimated that he had not receiv....

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....1976. In the meantime, having regard to the interests of the customers, who were worrying about return of their money as also in order to save and protect its own business-reputation, the assessee paid up Rs. 46,163 on 16th Dec., 1975 to Indian Aluminium Co., for its shares as applied for by the above customers and also purchased 919 share of Larson and Toubro Ltd. from open market for above customers. The payment made by the assessee for the shares of Indian Aluminium and Larson & Toubro were debited to Mr. Palida's account as debt due from him, for the recovery of which Civil Suit was already filed, as stated above. Later on, by the Court's decree dt. 27th Oct., 1977 Mr. Palida and his two sureties were ordered to pay an aggregate amou....

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....ication money in respect of new companies etc., is part of the business of the assessee firm. In any case, the loss is required to be allowed either under s. 37 or under s. 28 itself. 5. The ld. Departmental Representative at the outset submitted that he had not received the relevant records. However, he submitted that quantum of loss was not in dispute only whether the same is required to be allowed or not is required to be decided. 6. We have gone through the relevant materials brought to our notice. In our opinion, the assessee is entitled to the deduction as claimed. The reasons are as follows: (i) the necessary entries in respect of receipts of case etc., cannot be found in the books of accounts of the assessee because the cas....