TMI Blog2012 (9) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of business of promoting industrial development in the State of Kerala, had promoted M/s. V Ltd. As a promoter, it was in a position to find out whether M/s. V Ltd was in a position to carry on business in future. Thirdly, M/s. V Ltd was a typical Public/Private partnership(PPP). None of these aspects have been considered by the Tribunal as well as by the High Court. Lastly, the Reference Application was made in February, 1988; declaration was made in February, 1988, by BIFR that M/s. V Ltd has become a sick Company. Till the end, the Company could not even be revived. It has been wound up. In the circumstances, applying the commercial test and business exigency test, we are of the view that both the conditions u/s 36(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year 1974. Though M/s. Vanchinad Leathers Limited started commercial production in the year 1977, it closed in the year 1980 due to poor performance. It was re-opened in September, 1982, and again closed down in January, 1983. The Company had huge liabilities by end of December, 1986, running into Rs.362.80 lakhs as against its assets worth Rs.106.80 lakhs. In February, 1988, M/s. Vanchinad Leathers Limited moved a Reference Application for declaration that it was a sick Company under BIFR. On inquiry, a declaration was made by BIFR vide Order dated February 22, 1988, that M/s. Vanchinad Leathers Limited, was a sick Company. In the circumstances, suit and recovery proceedings were not adopted by the appellant. The Tribunal seems to be pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted above, the Reference Application was made in February, 1988; declaration was made in February, 1988, by BIFR that M/s. Vanchinad Leathers Limited has become a sick Company. Till the end, the Company could not even be revived. It has been wound up. In the circumstances, applying the commercial test and business exigency test, we are of the view that both the conditions under Section 36(1)(vii) read with Section 36(2)(i)(b) of the Act are satisfied. 7. Before concluding, we are of the view that at the relevant time, prior to 1st April, 1989, two distinct approaches were available to the assessee in the matter of write off of bad debt. This has been examined by the Gujarat High Court in the case of Vithaldas H. Dhanjibhai Bardanwala vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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