TMI Blog1981 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ince been answered against the assessee and in favour of the revenue by the Full Bench in CIT v. Khem Chand Bahadur Chand [1981] 131 ITR 336, vide judgment dated June 4, 1981. The remaining question reads as under : " (2) Whether, on the facts and in the circumstances of the case, the Tribunal's, finding that the debts due by, (i) Dhola Ram, (ii) Manghu Ram, and (iii) Jagdish Chemical Works were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction could be allowed only if the debt is established to have become a bad debt in the previous year and that the rule laid down runs counter to the earlier decision of the same court in Raja Bahadur Mukundlal Bansilal v. CIT [1952] 22 ITR 94, which was based on a Privy Council decision in CIT v. Chitnavis [1932] 2 Comp Cas 464; LR 59 IA 290; AIR, 1932 PC 178. There are 3 items in dispute; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dships of the Privy Council observed (p. 181 of AIR) (see also p. 471 of 2 Comp Cas): " Whether a debt is a bad debt and, if so, at what point of time it became a bad debt, are questions which, in their Lordships' view, are questions of fact, to be decided in the event of dispute by the appropriate Tribunal, and not by the ipse dixit of any one else. These observations were followed by Chagla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xi) of the Act. This provision of law has since been differently phrased in s. 36(1)(vii), according to which a deduction could be claimed only with respect to a debt which is established to have become a bad debt. There can be no doubt about the intention of the Legislature in bringing about this change which could be nothing but to require the assessee to establish that the debt has become, in f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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