TMI Blog2015 (4) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... so, subsequent to the aforesaid assessment year, permitted the assessee to write off the amount. When law permits the assessee to get the deduction, there is no reason why the assessee should not be given the deduction in the assessment year 1980-81 itself. Any other course would involve the assessee in the liability for payment of further tax and interest. - ITR No. 2 of 2005, ITR No. 8 of 2005 - - - Dated:- 7-4-2015 - Girish Chandra Gupta And Arindam Sinha,JJ. For the Petitioner : Mr J P Khaitan, Sr. Adv. Mr P Bag, Adv. Mr P Jhunjhunwala, Adv. Mr A K Dey, Adv. For the Respondents : Mr R K Sinha, Adv. Md Nizamuddina, Adv. ORDER The court : Briefly stated, the questions of law being the subject matter of this referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Khaitan, learned Senior advocate appearing for the assessee to a judgement of the Bombay High Court in the case of Karamsey Govindji vs. CIT reported in (1957) 31 ITR 953. What had happened in that case was that the assessee had advanced a sum of ₹ 70,000/- to a film producer without security in 1945 and 1946. The amount was written off by him as bad debt in November, 1947. The debtor was adjudicated insolvent in July, 1948. There was evidence to show that before the amount was written off by the assessee, the debtor had produced a film and the writing off took place even before the debtor had exploited the film produced by him. The Bombay High Court held that the omission on part of the Income tax authorities to permit the deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier previous year, but the Income-tax Officer had not allowed it to be deducted on the ground that it had not been established to have become a bad debt in that year. The provisions appearing in Clause (vii) of Sub-section 1 of Section 36 requiring the assessee to satisfy twin conditions namely to write off the debt and to establish that the debt has become irrecoverable are subject to the provisions contained in Sub-section 2. Therefore, the rigour of Clause (vii) of Sub-section 1 of Section 36 is relaxed by Clause (iii) of Sub-section 2 of Section 36. In that view of the matter, there can be no real objection, nor has Md. Nizumuddin urged any, to the deduction being allowed on account of bad debt either in the assessment year 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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