SHYAMAL KUMAR SEN, J. ( 1 ) THE question for determination pursuant to direction passed by this court under Section 256 (2) of the Income-tax Act, 1961, is as follows :"whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the conditions laid down under Section 36 of the Income-tax Act, 1961, were satisfied with regard to the debt of Rs. 1. 21 crores and in that view of the matter directing the Income-tax Officer to allow deduction of Rs. 1. 21 crores as bad debts" ( 2 ) THE facts, inter alia, leading to this reference as appearing from the statement of case are that the assessee is a limited company deriving income from business in the manufacture of tyres, tubes, etc. Between November, 1976, and September, 1977, the assessee exported goods to several parties in Turkey amounting in all to Rs. 2,72,19,587. The Central Bank of Turkey, however, did not transfer the amount deposited by the purchasers in Turkey to India. In view of the extremely critical foreign exchange reserve position, the Government of Turkey imposed a ban on all remittances out of Turkey. As a result, the amount deposited in the Central Bank of Turkey remained there. The normal period of 90 days within which the sales proceeds should have been realised expired without any receipt by the assessee on account of the aforesaid ban. The assessee entered into correspondence with the Government of Turkey through the Indian Embassy there. In the meantime, the Turkish currency was devalued successively on five occasions between October 27, 1976, and April 10, 1979, with the result that the value of the Lira came down to 30. 66 per cent. of its value prior to the first devaluation. As a result, the value of Lira deposited by the purchasers came down in terms of U. S. dollars and also, as a consequence, in terms of rupees. During the calendar year 1979, which is the previous year under consideration, the assessee received a letter dated March 6, 1979, from the Indian Embassy in Turkey saying that there was no chance of realising the Turkish debts in the foreseeable future due to acute foreign exchange shortage. During the calendar year 1979, which is the previous year under consideration, the assessee received a letter dated March 6, 1979, from the Indian Embassy in Turkey saying that there was no chance of realising the Turkish debts in the foreseeable future due to acute foreign exchange shortage. The directors of the assessee-company, while finalising the accounts for the calendar year 1979, took note of the above fact and wrote off a sum of Rs. 1,21,00,000 as bad debts. A sum of Rs. 95 lakhs was written off from the current profit and loss account and the balance of Rs. 26 lakhs was written off from the provision for bad and doubtful debts account. There was no dispute that the sales made by the assessee to the Turkish purchasers were included in the sale proceeds of the relevant years and also the fact that the provision made for bad and doubtful debts was subjected to tax in the year in which the provision was created. The sum of Rs. 1. 21 crores claimed as bad debts was arrived at after valuing the Lira deposited in the Central Bank of Turkey in terms of rupees as on December 51, 1979. There was another fact which had to be taken into consideration, namely, that a decree was promulgated on January 25, 1980, by the Government of Turkey under which the debts of the foreigners would be paid only after 54 months, and that too, in small instalments over a period of further ten years. The assessee got the debt as on December 31, 1979, valued by its bankers who opined that after discounting the value as on December 31, 1979, it would be only Rs. 28,85,234 which was less than the billed amount of Rs. 2,72,19,587 by Rs. 2,43,34,303. ( 3 ) THE assessee claimed the aforesaid sum of Rs. 2,43,34,303 as business loss as arising in the calendar year 1979. Alternatively, it claimed deduction for bad debt of Rs. 1. 21 crores which was actually written off from the books and taken into account in the audited profit and loss account and balance-sheet of the year under consideration. ( 3 ) THE assessee claimed the aforesaid sum of Rs. 2,43,34,303 as business loss as arising in the calendar year 1979. Alternatively, it claimed deduction for bad debt of Rs. 1. 21 crores which was actually written off from the books and taken into account in the audited profit and loss account and balance-sheet of the year under consideration. The Income-tax Officer rejected both the claims of the assessee on the ground that there was a chance of recovery of the amount because of the decree dated January 25, 1980, of the Government of Turkey and the negotiations which were being carried on by the Indian Embassy in Turkey. ( 4 ) THE assessee appealed to the Commissioner of Income-tax (Appeals) and contended that its claims should have been allowed. The Commissioner of Income-tax (Appeals) found that no trading loss could be claimed in the calendar year 1979 because the transactions were made in the calendar years 1976 and 1977. However, coming to the alternative claim for bad debts, the Commissioner of Income-tax (Appeals) allowed the sum of Rs. 95 lakhs as bad debt which had arisen in the calendar year 1979 and had been written off from the books. Regarding the balance of Rs. 26 lakhs, the Commissioner of Income-tax (Appeals) disallowed the same on the ground that the assessee did not write off the same from the books of account and so one of the essential conditions for allowing deduction for bad debt was not satisfied in respect of the said amount of Rs. 26 lakhs. ( 5 ) THE assessee appealed to the Tribunal and urged that the claims of the assessee should have been allowed. On the other hand, the Department resisted the claims of the assessee. The Tribunal considered the contentions of both the parties and held as below ;". . . . we find that though there is a provision under Section 36 (1) (vii) for allowance of even a part of a bad debt, there is no such provision for allowing a part of a business loss. Evidently, the transactions of 1976 and 1977 had not yet come to an end because negotiations were still going on. We do not find any provision in the Act to allow business losses part by part in a piecemeal way. Evidently, the transactions of 1976 and 1977 had not yet come to an end because negotiations were still going on. We do not find any provision in the Act to allow business losses part by part in a piecemeal way. Hence, we agree with the Revenue authorities that no business loss could be allowed in the calendar year 1979. The directors of the assessee-company have also taken into account only the bad debt of Rs. 1. 21 crores in the printed accounts and they have not referred to any business loss suffered by the company during the year under consideration. This fact, in our opinion, strengthens the aforesaid view of ours. However, coming to the assessee's claim for bad debt, we find that the conditions for allowing the bad debt as deduction have been fulfilled in this case. It was the letter dated March 6, 1979, that convinced the assessee that at least a part of the amount due from the Central Bank of Turkey had become irrecoverable and bad. This event occurred in the calendar year 1979, The quantification had been properly made by an expert and no flaw has been found therein. The sum of Rs. 26 lakhs had also been written off from the books of the assessee as it is apparent from Note 12 to the printed accounts appearing at page 28 thereof. The only difference is that while a sum of Rs. 95 lakhs has been written off from the current profits, the balance of Rs. 26 lakhs has been written off from the taxed provision made in the earlier years. Hence, we accept the alternative contention of the assessee. In other words, we uphold the disallowance of business loss. We also uphold the allowance of Rs. 95 lakhs as bad debt given by the Commissioner of Income-tax (Appeals) and, in addition, allow further sum of Rs. 26 lakhs as deduction or bad debt. " ( 6 ) WE have considered the submissions of the parties and also the records referred to us and the decision cited from the Bar. ( 7 ) THE Tribunal was justified in holding that the business loss cannot be allowed part by part in a piecemeal way, and, as such, no business loss could be allowed in the calendar year 1979. ( 7 ) THE Tribunal was justified in holding that the business loss cannot be allowed part by part in a piecemeal way, and, as such, no business loss could be allowed in the calendar year 1979. ( 8 ) THE Tribunal was justified in coming to its conclusion on the basis of the fact that the directors of the assessee-company have also taken into account only the bad debt of Rs. 1. 21 crores in the printed accounts and they have not referred to any business loss suffered by the company during the year under consideration. The said finding of the Tribunal is a finding which has not been disputed. The Tribunal, however, allowed the bad debt since the condition for allowing it have been fulfilled. The Tribunal took into consideration that the sum of Rs. 26 lakhs had also been written off from the books of the assessee as it is apparent from Note 12 to the printed accounts and the only difference is that while a sum of Rs. 95 lakhs has been written off from the current profits the balance of Rs. 26 lakhs has been written off from the taxed provision made in the earlier years. ( 9 ) THE learned advocate for the assessee has referred to the judgment and decision in the case of V. N. Rajan and Co. v. CIT. ( 10 ) IN that case, the claim in respect of the bad debt for the assessment year 1971-72 on account of debtors was disallowed by the Income-tax Officer as the assessee obtained ex parte decrees. The Tribunal found that as the decrees were still being pursued for execution the assessee could not be said to have considered the debts to be bad till December 31, 1970. It was on this basis that the Appellate Assistant Commissioner as also the Tribunal came to the conclusion that the debt did not become bad in the assessment year 1971-72. It was on this basis that the Appellate Assistant Commissioner as also the Tribunal came to the conclusion that the debt did not become bad in the assessment year 1971-72. In spite of some change in the phraseology as between the Act of 1922 and the Act of 1961 for allowance of debt, the fundamental principles applicable are : (a) whether the debt has become bad on the basis of the facts of the case ; (b) when the fact-finding Tribunal arrives at a conclusion as to the debt having become bad, the conclusion is not to be interfered with in the reference ; (c) the question must be looked at from the practical point of view as to whether the debt has become irrecoverable and bad. It was also settled that the entry by way of write-off is prima facie evidence of the debt having become bad but not a conclusive criterion and the onus rests on the assessee to establish that the debt has become bad in the relevant year. We find that the Tribunal in its finding has been guided by all these basic principles and there is no perversity or infirmity in the finding of fact by the Tribunal. ( 11 ) THE Tribunal was, therefore, justified in upholding the order of the Commissioner of Income-tax (Appeals) by disallowing the business loss. ( 12 ) WE are, therefore, of the view that the decision of the Tribunal does not call for any interference by this court. ( 13 ) ACCORDINGLY, the question is answered in the affirmative and in favour of the assessee and against the Revenue. There wilt be no order as to costs. .