Law:

Section:

Bad debt---   --- Subsequent amalgamation with good debts of same debtor Whether entitles creditor to write it of in a later year-When debt became bad Question of fact Interference by High Court.   If a debt has become bad, subsequent amalgamation of that debt with other debts due from the same debtor which had not become bad, could not revive the bad debt so as to enable the creditor to write it off as a bad debt in a later year.   The question, whether a debt is bad, is one of fact and if there is some evidence to justify the conclusion of the Tribunal it is not open to the High Court in a reference under section 66 of the Income tax Act to re appreciate the evidence.   Commissioner of Income tax v. S. M. Chitnavis (1932) 2 Comp. Cas. 464 ref. JUDGMENT   SHAH, J. In the proceedings for assessment of income tax for the year 1950 51, the assessees, who are a public limited company carrying on the business of banking, claimed that an amount of Rs. 4,22,582 due in the account of Messrs. Nandlal Inderchand, having been actually written oh as irrecoverable in the year of account 1949, they were entitled in the assessment of the profits of that year to be allowed the amount as a bad and doubtful debt under section 10 (2) (xi ) of the Indian Income tax Act. The amount of Rs. 4,22,582 consisted of three items as follows :   Rs. 2,11,089 due from the firm styled Messrs. Nandlal Inderchand under an accountwhich commenced in the year 1943. In this account the debtor had pledged shares of the value of Rs. 28,000 odd.   Rs. 1,02,325 originally due from a firm carrying on business in the name of B. I. G.Co., Calcutta.   Rs. 1,09,168 originally due from a firm carrying on business in the name of Fulchand Srinarain, Calcutta.   For the amounts due under the accounts styled Messrs B. I. G. Co. and Fulchand Srinarain, there was no security. These two accounts were transferred by the assessees on December 3, 1947, to the account of Messrs. Nandlal Inderchand and amalgamated with that account.   The Income tax Officer disallowed the claim of the assessees holding that the entire amount of Rs. 4,22,582 had become irrecoverable in…