TaxTMI 
TaxTMI 
1979 (6) TMI 56
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....d Rs. 4,337 (4) M/s. Usha Spinning and Weaving Mills Ltd., Faridabad Rs. 7,630 It was explained by the assessee that the last ray of hope of recovery of aforesaid debts has extinguished during the previous year under consideration and therefore, it has written off the debts in question. The ITO on enquiry found that it would not be correct for the assessee to allege that it has lost all hope of recovery of the debts, for the assessee was still in correspondence with regard to the recovery of the debts in question with the debtors. Thus, in the case of M/s Ajanta Textiles Ltd, Ghaziabad the debt had been confirmed by the debtor vide debtor's letter dt. 13th July, 1970 and that the assessee had sent a remainder to the said debtor on 20th....
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....vidence before him to prove that the alleged debts really became bad during the previous year, and therefore, according to him, in the absence of any details, it was difficult to accepts the appellant's claim that the amount in question had become bad during the year under consideration. 2. On appeal, the learned AAC confirmed the order of the ITO as he felt that the assessee had not been able to bring on record any facts, which would go to show that the debts in question had become bad during the year under consideration. 3. The learned counsel for the assessee challenges the aforesaid findings of the learned AAC before us and submit that in order to see that debt has become bad it was not necessary for the assessee to show that the de....
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.... pointed out that in the face of the facts as brought out by the authorities below, there was hardly any justification to say that the last ray of hope had expired. According to him, the assessee was still, by the end of the accounting period, corresponding with the parties concerned for recovery of debts and, therefore, it could not at all be said that the last ray of hope had been extinguished. In the case of M/s Usha Spinning & Weaving Mills Ltd., Faridabad, it was stated that the assessee has led no evidence to show that the debt was good at the beginning of the year and that it became bad at the end of the year and, therefore, the authorities below were justified in rejecting the appellant's claim. 4. After carefully examining the fa....
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....e were receipts from the said party on account of which the balance outstanding came down to Rs. 7,629.86 only. The said debit balance has since 1st Jan., 1969 remained stationary. No further payments have been received from this party either in the calendar year 1969, 1970 and 1971. The assessee was, in the circumstances, in our opinion, justified in presuming that after the expiry of three years from the date of the last transaction done sometime on 17th Sept., 1968, the hope of recovery of this amount from the said party was no more. This amount should, therefore, in our opinion, have been allowed as bad debt during the year under consideration. At the beginning of the accounting period, there was still some hope of recovery and, in any ....