- (1.) "(1) Whether on the facts and in the circumstances of the case, the learned Tribunal is justified in holding that the business debt had become bad and is allowable under s. 28/29/37(1) of the IT Act and accordingly deleting the addition of Rs. 52,65,237 made by the AO on account of unaccounted debtors which was confirmed by the learned CIT(A) ? (2) Whether on the facts and in the circumstances of the case, the learned Tribunal is justified in deleting the addition of Rs. 1 lac made by the AO on account of undisclosed income declared in the return, by holding that once the income has already been disclosed credit of the same must be given in all fairness and denial of such benefits on any pretext is not justified - 2. We have gone through the judgment of the learned Tribunal, so also the authorities below. 3. . So far as question No. 1 is concerned, that relates to the deletion of a particular amount on account of debts having become bad, from out of the unaccounted debtors. The learned AO and the CIT had made the addition in the income, as undisclosed income during the block period, on the basis of the documents Annexs. A -1, A -6 and A -8, showing the debtors in the said amount. 4. The learned Tribunal has found, that those debts as mentioned in the said document are bad debts, as firstly more than three years have elapsed, and therefore, they have become barred by time, likewise, there is no enforceable document bearing any signature on the side of the loanee, and as such the amount is not recoverable. Consequently, it has been allowed by the learned Tribunal as bad debt. 5. Of course, the learned Tribunal has considered that this was required to be allowed under ss. 28 and 29 r/w s. 37(1), but then these ss. 28, 29 and 37 have no application on this aspect, as they are the provisions for computing the income. The matter in our view, in view of the above factual finding of the Tribunal is better covered by s. 36. 6. According to provisions of s. 36(1)(vii) as it then existed, deduction was admissible in respect of any debt, or any part thereof, which is established to have become a bad debt in the previous year. 7. In our view, the authorities below i.e. AO and CIT have proceeded simply on the basis of existence of the entries in the diary about the purported claim of outstanding by the assessee, while the learned Tribunal has gone into the legal aspect of the matter, to find out as to whether the debt could be said to be at all recoverable, and since it was not evidenced by any enforceable document, with the force of which recoveries can be made, apart from the fact that limitation for recovery has already expired, it was found that the debt has become bad, by recording a finding that recovery does not at all appear to be justifiable or plausible which any prudent man would readily accept. Thus, this finding of the learned Tribunal, does, in our view, clearly mean, that the learned Tribunal has found that debt is established to have become bad debt. Obviously, the deduction on that count has rightly been allowed. In our view, though s. 28, 29 and 37 may not apply, but it was very much allowable under s. 36(1)(vii) and the deduction was rightly allowed. Question No. 1 is accordingly answered against the Revenue, and in favour of the assessee. 8. Coming to question No. 2, in our view, the finding recorded by the learned Tribunal in this regard are pure finding of fact arrived at on the basis of the appreciation of material on record, and does not give rise to any substantial question of law. The question is, therefore, answered against the Revenue. The net result is that the appeal fails and the same is dismissed.;