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TMI Blog2005 (5) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... For the assessment year in question, the respondent-assessee claimed bad debt of Rs. 1,49,433. on the advances made to M/s. La Medica (P) Ltd. of Delhi. Details of loan are given as under: -------------------------------------------------- Date of giving loan Amount Received back -------------------------------------------------- 16-4-1977 50,000 600 11-3-1977 1,00,000 600 7-2-1977 1,00,000 600 17-3-1977 1,00,000 600 1-4-1977 50,000 600 ----------------------------- 4,00,000 3,000 -------------------------------------------------- The respondent-assessee in reply to the query raised by the Assessing Officer, mentioned that the amount was outstanding against M/s. La Medica (P) Ltd. as per balance-sheet drawn on September ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated September 14, 1993, accepted the claim of the respondent-assessee by observing as under: "We have considered the rival submissions and have gone through the evidence filed on record. Letter of the assessee and reply of M/s. La Medica (P) Ltd., established the fact that the assessee made earnest efforts to recover its amount from the company but the company was in a financial crisis. Therefore, it could not pay back the amount. Under these circumstances, the assessee has written off this amount. In the case of Jethabhai Hirji and Jethabhai Ramdas v. CIT [1979] 120 ITR 792 (Bom), the hon'ble Bombay High Court has observed that whether a debt has become a bad debt is an objective fact to be determined objectively and the determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent-assessee who was aged about 88 years had made all efforts to recover/realise this amount of loan and having failed in his effort had written off the same as a bad debt. Thus, the Tribunal had come to the conclusion that the debt in question, which was given by way of loan to M/s. La Medica (P) Ltd., Delhi, in the year 1977 became irrecoverable in the assessment year in question and, therefore, the respondent-assessee had rightly written it off and claimed it as bad debt. Merely on account of the fact that no legal proceeding was initiated by the respondent-assessee, it would not make the bad debt a recoverable one. It is just like sinking good money after bad money and it is in the wisdom of the respondent-assessee to take or not to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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