Hon'ble President, ITAT, vide his order dated 19-11-2004, has constituted this Bench for considering following issues: 'Whether as per existing provisions even after amendment with effect from 1-4-1989, it is obligatory on part of assessee to prove that debt written off by him is indeed Bad Debt for purpose of allowance under section 36(1)(vii)?' This Bench has been constituted because of cleavage of opinion among Benches of Tribunal. Tribunal in case of ITO v. Anil H. Rastogi [2003] 86 ITD 193 (Mum.) (TM) has taken view that deduction under section 36(1)(vii) of Income-tax Act, 1961 (Act) can be allowed if assessee writes off debt as irrecoverable in his books of account. According to this decision, it is not necessary for assessee to demonstrate that debt has become bad and it is left to prudence and judgment of businessman to consider it as bad and irrecoverable debt and writing off same in books of account. On other hand, Mumbai Bench of Tribunal in case of Netwest Finance Ltd. [IT Appeal No. 1975 (Mum.) of 1998] vide order dated 18- 12-2003 has held that even after amendment, assessee has to establish that debt had become bad for claiming deduction under section 36(1)(vii). This difference of opinion has led to constitution of this Bench. At this stage, it may also be mentioned that question referred to Special Bench is purely legal one and, therefore, it is not necessary for us to narrate facts of case before us. Therefore, we would now narrate respective contentions raised by both parties. 2. Mr. Daniel, Learned Special Counsel for Revenue, has contended before us that no deduction under section 36(1)(vii) can be allowed unless twin conditions are satisfied namely (i) debt in respect of which deduction is claimed is bad debt and (ii) such debt is written off in accounts of assessee for previous year. According to him, deduction can be allowed to assessee only when he writes off bad debt which is irrecoverable but such deduction cannot be allowed when he writes off good debt. Therefore, it must be shown that debt has become bad and irrecoverable. Proceeding further, it was submitted that first and cardinal principle of interpretation is that where language used by Legislature is clear and unambiguous, then natural meaning should be given to words used by Legislature and there is no room for intendment. It is only in case o f ambiguous language that aids to interpretation can be invoked. According to him, language used by Legislature is quite simple, clear and unambiguous and, therefore, words 'bad' and 'irrecoverable' cannot be ignored and proper meaning has to be given to these two words. In support of such prepositions, he relied on following decisions: (i) Mohammad Ali Khan v. CWT [1997] 224 ITR 672 (SC) (ii) Padmasundara Rao (deceased) v. State of Tamil Nadu [2002] 255 ITR 147 (SC) (iii) Guru Devdutta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980 (P-11) (iv) Gursahai Saigal v. CIT [1963] 48 ITR 1 (SC) (v) Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC) and (vi) CIT v. Shahzada Nand & Sons [1966] 60 ITR 392 (SC). Proceeding further, it was submitted by him that meaning and effect of each word should be given while interpreting provisions of statute since every word of statute has to be assumed to have been deliberately and consciously incorporated by Legislature. Reliance was placed on judgment of Hon'ble Punjab & Haryana High Court in case of Dalmia Biscuits Ltd. v. CIT [1992] 194 ITR 749, judgment of Privy Council in Quebee Railway, Light, Heat & Power Co. v. Vrandy AIR 1920 PC 181, judgment of Hon'ble Supreme Court in case of CIT v. Moon Mills Ltd. [1966] 59 ITR 574. In this connection, he also referred to dictionary meaning as under: 'Chambers 20th Century Dictionary says Bad Debt = debt that cannot be recovered Mitra's Legal & Commercial Dictionary says Bad Debt: debt becomes bad debt when Creditor has no reasonable chance of recovering it from debtor: as held in Deoniti Prasad v. Commissioner of Income-tax AIR 1953 Pat. 360. Law Lexicon Ed. Justice Y.V. Chandrachud: Bad Debt: Debt which cannot reasonably be collected. debt about which t h e r e is no reasonable expectation of recovery; debt believed to be unrecoverable.' 3. In continuation of his above submissions, it was pleaded by him that it is for assessee to demonstrate that debt has become bad and irrecoverable since onus is on assessee to prove that conditions for claiming deductions are satisfied. Reliance was placed on decision of Hon'ble Calcutta High Court in case of CIT v. Dunlop India Ltd. [1994] 209 ITR 987, and decision of Hon'ble Rajasthan High Court in case of CIT v. Hanuman Tubewell [1995] 211 ITR 1047. Further, Assessing Officer is also not precluded from making enquiry as to whether debt has become bad since Assessing Officer has to ensure that conditions for claiming deductions are fully satisfied. Proceeding further, it was submitted that if contention of assessee is accepted then it would lead to absurd results and encourage dishonest assessees inasmuch as such assessee would be at liberty to evade tax by writing of good debt whenever there is huge profit and offer same for taxation under section 41 of Act in year of loss. According to him, such erroneous interpretation cannot be accepted since it would frustrate object of Legislature. In this connection, he also referred to Page 878 of 'Law and Practice of Income Tax Law by Kanga, Palkhiwala and Vyas, 9th Edition', where Learned Jurist opined as under: 'Under amended clause, requirement of 'establishing' that debt had become bad in relevant accounting year is dispensed with; all that assessee has to show is that bad debt has been written off as irrecoverable. But subject- matter of clause is still 'any bad debt' and 'not any debt.' consequences of amendment are mainly three: (i) assessee cannot arbitrarily, irrationally or mala fide treat good debt as bad write it off in his accounts. (ii) Where assessee has acted bona fide and reasonable, Assessing Officer cannot substitute his own subjective judgment, but must accept assessee's decision, as to quality of debt. (iii) assessee is not obliged to write off and claim debt in very year in which it becomes bad. He can write it off and claim it in subsequent year in which debt continues to remain bad.' 4. Proceeding further, it was submitted by him that issue whether debt is bad or not, was subject-matter of adjudication before High Courts. Firstly, he referred to Hon'ble Bombay High Court judgment in case of Jadavji Narsidas & Co. v. CIT [1963] 47 ITR 411, wherein, it has been held that bad debt is debt of which chance of recovery is 'nil' and there is no hope of recovering it. Then, he referred to another decision of Hon'ble Bombay High Court in case of Raja Bahadur Mukundlal Bansilal v. CIT [1952] 22 ITR 94, for proposition that debt becomes bad when creditor has no reasonable expectation of recovering it. Then he referred to latest decision of Hon'ble Bombay High Court in case of CIT v. General Insurance Corpn. of India, (No. 2) [2002] 254 ITR 204, where Hon'ble Bombay High Court considered provisions effective from 1-4-1989. According to him, it has been held therein that to extent of exact requirement of writing off concerned debt as irrecoverable, law remains same even after 1-4-1989. He then referred to Hon'ble Madhya Pradesh High Court judgment in case of CIT v. Nand Manahor Agencies [2003] 259 ITR 723, for proposition that debt has to become irrecoverable. Then he referred to Hon'ble Calcutta High Court judgment in case of Rallis India Ltd. v. CIT [2002] 246 ITR 170, wherein it was held that claim for deduction on account of bad debt was pre-nature since assessee had not filed suit for recovery of amount. In this connection, he also referred to Hon'ble Kerala High Court decision in case of Travancore Tea Estate Co. Ltd. v. CIT [1992] 197 ITR 528 at Page-536, which has been affirmed by Hon'ble Supreme Court in Travancore Tea Estates Co. Ltd. v. CIT [1998] 233 ITR 203 and Hon'ble Madras High Court decision in case of Bhawarlal C. Bafna v. Asstt. CIT [2002] 257 ITR 687. He relied on decision of Delhi Bench of Tribunal in case of Dy. CIT v. India Thermit Corpn. Ltd. [1996] 56 ITD 307, wherein, it has been held that even after amendment disallowance under section 36(1)(vii) could be given only when bad debt was written off and not when good debt written off. For this proposition, he also relied on decision of Mumbai Bench of Tribunal in case of Netwest Finance Ltd. (supra). Further reliance was placed on decision of Mumbai Bench of Tribunal in case of R.R. Nabar & Co. [IT Appeal No. 984 (Mum.) of 1999 dated 25-3-2004], wherein, it has been held that twin condition must be satisfied namely (i) that assessee has to actually write off bad debt, (ii) that debt written off by assessee should be bad debt. 5. In view of above submissions, it was argued by him that use of t h e words 'bad' and 'irrecoverable' cannot be ignored while interpreting provisions of section 36(1)(vii) of Act. If these words are taken into consideration, then, claim of assessee cannot be allowed merely on writing off same in books of account. Thus, according to him, claim can be allowed only where it has been shown that debt has become bad and is written off in accounts of assessee as irrecoverable. 6. On other hand, Learned Counsel for assessee Mr. Pardiwala, contended that while interpreting provisions, one should look into intention of Legislature. According to him, if provisions are amended in order to remove hardship or mischief of pre-amended provisions, then Hyden's Mischief Rule of interpretation should be applied. It was submitted b y him that as per pre-amended provisions, assessee was required to establish that debt which was claimed as deduction had become bad during previous year and Assessing Officer was empowered in terms of section 36(2) to allow deduction in another year if he was of view that debt had become bad in earlier or later year. This led to litigation between assessee and department. Therefore, in order to eliminate such disputes, provisions were amended with effect from 1-4-1989. In this connection, he also referred to Circular explaining provisions of Direct Tax Laws (Amendment) Act, 1987, by which provisions of section 36 were amended. Accordingly, it was argued by him that now deduction is allowable in year Accordingly, it was argued by him that now deduction is allowable in year in which amount of debt is written off in accounts. Proceeding further, it was submitted that if view of Revenue is accepted then consequence would be that assessee would not be able to claim deduction in any subsequent year when, according to Revenue, debt has become bad as conditions of writing off in that year would not be possible. In this connection, he relied on decision of Apex Court in case of Addl. CIT v. Surat Art Silk Cloth Mfrs. Association [1980] 121 ITR 1. 7. Proceeding further, it was submitted by him that words 'bad debt' have been used to broadly indicate nature of allowance. Even if any meaning is to be given to such word, then debt should be presumed to be bad when it is written off in books of assessee, as held by Hon'ble Bombay High Court in case of Lords Dairy Farm [1955] 27 ITR 700 at Page-708. Therefore, it is for Department to prove to contrary by leading some evidence. Alternatively, it was agreed by him that assessee is not required to prove beyond doubt that debt has become bad. It is only honest and bona fide judgment of assessee which should be considered in determining question whether debt is bad or not. Reliance was placed on various judgments namely- Jethabhai Hirji & Jethabhai Ramdas [1979] 120 ITR 792 (Bom.), CIT v. Johilla Coalfields (P.) Ltd. [1984] 146 ITR 276 (Mad.) and Sarangpur Cotton Mfg. Co. Ltd. v. CIT [1983] 143 ITR 166 (Guj.). 8. Proceeding further, it was submitted by him that this issue has been considered by Tribunal in various cases. Reference was made to these decisions - Dy. CIT v. Paks Trade Centre [1995] 53 ITD 313 (Cal.), Pradeshijya Industrial & Investment Corpn. of India U.P. Ltd. v. Dy. CIT [1996] 54 TTJ (All.) (Mag.) 438, Newdeal Finance & Investment Ltd. v. Dy. CIT [2000] 74 ITD 469 (Chennai), Jayanti Commerce Ltd. v. Asstt. CIT [1997] 61 ITD 183 (Cal.), Wipro Information Technology Ltd. 88 TTJ 778, K. Raheja Development Corpn. v. Asstt. CIT [2005] 2 SOT 744 (Bang.), Shobanlal Jain v. Asstt. CIT [2003] 79 TTJ (Delhi) 446, Dy. CIT v. Cat Vision Products Ltd. [2004] 84 TTJ (Delhi) 241 and Anil H. Rastogi (supra). All these decisions were referred for proposition that debt is to be allowed as deduction in year of writing off in books of account and assessee is not required to prove that debt has become bad. It was further submitted that decision in case of Anil H. Rastogi (supra) is binding as it was decision of three Members which is akin to Full Bench as held by Hon'ble Delhi High Court in case of P.C. Puri v. CIT [1985] 151 ITR 584. Lastly, it was submitted by him that decision relied on by Learned Special Counsel for Revenue are either misplaced or distinguishable. On other hand, Hon'ble Gujarat High Court decision in case of CIT v. Girish Bhagwat Prasad [2003] 256 ITR 727 supports case of assessee. 9. In rejoinder, it was pointed out by Mr. Daniel that Gujarat High Court judgment relied on by Learned Counsel for assessee has been considered by Mumbai Bench of Tribunal in R.R. Nabar & Co. (supra) and, therefore, does not help assessee. 10. Rival contentions have been considered carefully. question for our consideration is whether for claiming deduction under amended provisions of section 36(1)(vii) of Act, mere writing off debt in books of account is sufficient or assessee is also required to show that debt has become bad. answer to this question would depend on interpretation of language used by Legislature. It is cardinal rule of interpretation that where language used by Legislature is clear and unambiguous then plain and natural meaning of words should be supplied to language used and resort to any rule of interpretation to unfold intention is permissible only where language is ambiguous. Plethora of decisions of Apex Court are there to support this proposition. Hon'ble Supreme Court, in case of Smt. Tarulata Shyam (supra), approved observations in case of Cape Brandy Syndicate v. Inland Revenue Commission (1921) 1 KB 64 by observing as under: 'To us, there appears no justification to depart from normal rule of construction according to which intention of Legislature is primarily to be gathered from words used in statute. It will be well to recall words of Rowlatt, J. in Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 1 KB 64 (KB) at Page 71, that: '. . .in taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about Tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at language used.' Once it is shown that case of assessee comes within letter of t h e law, he must be taxed, however, great hardship may appear to judicial mind to be.' In case of Keshavji Ravji & Co. v. CIT [1990] 183 ITR 1, Apex Court observed as under: 'As long as there is no ambiguity in statutory language, resort to any interpretative process to unfold legislative intent becomes impermissible. supposed intention of Legislature cannot then be appealed to whittle down statutory language which is otherwise unambiguous. If intendment is not in words, it is nowhere else. need for interpretation arises when words used in statute are, on their own terms, ambivalent and do not manifest intention of Legislature.' In case of Guru Devdatta VKSSS Maryadit (supra), Their Lordships of Apex Court held as under: 'It is cardinal principle of interpretation of statute that words of statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in context or in object of statute to suggest to contrary. golden rule is that words of statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when words of statute are clear, plain and unambiguous, then Courts are bound to give effect to that meaning irrespective of consequences. It is said that words themselves best declare intention of Law give. Courts have adhered to principle that efforts should be made to give meaning to each and every word used by Legislature and it is not sound principle of construction to bush aside words in statute as being inapposite surplus if they can have proper application in circumstances conceivable within contemplation of Statute.' Though there are various judgments upholding above principle but we may mention that Constitution Bench of Hon'ble Supreme Court in case on CIT v. Anjum M.H. Ghaswala [2001] 252 ITR 1, has endorsed above view by observing as under: 'This exercise of purposive interpretation by looking into object and scheme of Act and legislative intendment would arise, in our opinion, if language of statute is either ambiguous or conflicting or gives meaning leading to absurdity.' above judgments make it clear beyond doubt that Courts are not required to look into object or intention of Legislature by resorting to aids t o interpretation where language of provision is clear and unambiguous. Consequently, meaning of each word used by Legislature is to be given its plain and natural meaning and no word should be ignored while interpreting provision of statute. 11. Now, let us consider language employed by Legislature. Relevant provisions of section 36(1)(vii) as effective from 1-4-1989 read as under: '36(1)(vii) subject to provisions of sub-section (2), amount of any bad debt or part thereof which is written off as irrecoverable in accounts of assessee for previous year.' bare look at above provisions shows that there is no ambiguity in language used by Legislature. Clear and unambiguous words are used in above provisions. Therefore, in our view, no words used by Legislature can be considered as superfluous. Each word has to be given its due meaning. word 'debt' is qualified by word 'bad'. Therefore, it is not any or every debt which can be written off for claiming deduction. It must be bad debt. word 'bad' used by Legislature cannot be ignored. Therefore, before writing off debt, assessee must form honest opinion on basis of material on record that debt has become bad. Consequently, in our humble opinion, mere writing off any debt is not sufficient for claiming deduction under section 36(1)(vii). assessee must show, at least prima facie, that debt has become bad. If contention of assessee's counsel is accepted then it would lead to absurd result inasmuch as dishonest tax payers would be able to evade tax by writing off good debt in year of profit and subsequently offer same as income under section 41(1) in year of loss. Any interpretation which leads to absurdity or manipulation must be avoided. 12. submission of assessee's Counsel that words 'bad debt' indicate nature of allowance only and, therefore, such significance should not be attached to word 'bad' cannot be accepted. Such submission is contrary to cardinal rule of interpretation discussed by us earlier inasmuch as it would amount to deletion of word 'bad' from language used by Legislature. 13. At this stage, we may observe that basic idea of allowing any deduction is that true income can be determined only after setting off expenditure or losses incurred by assessee against revenue receipts. idea behind allowing deduction on account of bad debt is that loss is incurred when debt becomes bad and irrecoverable. So long as debt is good, assessee does not incur any loss and, therefore, question of allowing any deduction in respect of debt which has not become bad, does not arise. use of word 'bad' b y Legislature is deliberate and, therefore, such word cannot be ignored while interpreting provisions of section 36(1)(vii). 14. contention of Mr. Pardiwala that debt should be presumed to be bad unless proved otherwise by Revenue where such debt is written off in books of assessee also cannot be accepted. There cannot be any presumption regarding incurring of loss by assessee since, as per settled legal position, onus is on assessee to prove that conditions for claiming deduction are fulfilled or that expenditure or loss has been incurred by him. Reference can be made to judgment of Hon'ble Supreme Court in case of CIT v. Calcutta Agency Ltd. [1951] 19 ITR 191. Even Hon'ble Bombay High Court in case of R. Jethabhai Hirji and Jethabhai Ramdas (supra), has held that onus to prove bad debt is on assessee. If onus is upon assessee to prove factum of loss/bad debt, then question of raising presumption that debt written off was bad does not arise. Let us also explain through example - for instance, assessee-dealer in stationery goods sells such goods to Reserve Bank of India for Rs. 20 lakhs and writes off same, without any reasons, at end of year. On these facts, can it be presumed that debt was bad. answer is completely 'No' as by no stretch of imagination, it can be said that sum due from Reserve Bank of India is bad. As already stated such contention of assessee, if accepted, would frustrate object of Act and encourage dishonest tax payers to evade tax. Hence, such contention is rejected. Consequently, it has to be held that assessee must demonstrate, prima facie, that debt had become bad before it was written off. 15. At this stage, it may also be mentioned that Finance Act, 2001, has inserted following Explanation after proviso to section 36(1)(vii): 'Explanation.-For purposes of this clause, any bad debt or part thereof written off as irrecoverable in accounts of assessee shall not include any provisions for bad and doubtful debts made in accounts of assessee.' above insertion is retrospective effective from 1-4-1989. Legislature has made it clear that even doubtful debt cannot be written off. Though this Explanation relates to provisions for bad and doubtful debts, yet it gives clear indication that word 'bad' in section 36(1)(vii) is of prime importance and can not be ignored. It is only bad debt, which can be written off and not any debt. 16. Learned Counsel for assessee has also sought to apply Hyden's Mischief Rule and reliance was placed on judgment of Surat Art Silk Cloth Mfrs. Association (supra). said decision of Apex Court does not help t h e assessee as in that case it was clearly held 'The consequences of suggested construction cannot alter meaning of statutory provision where such meaning is plain and unambiguous, but they can certainly help to fix its meaning in case of doubt or ambiguity'. We have already observed that language of section 36(1)(vii) is quite plain and unambiguous. Therefore, Hyden's Mischief Rule cannot be applied. 17. Even assuming that Hyden's Mischief Rule is applicable for interpreting amended provisions of section 36(1)(vii), we are of view that such rule cannot be applied to interpretation of words 'any bad debt or part thereof' inasmuch as there was no mischief in this regard. mischief, if any, related to year in which debt was established to have become bad and also written off as irrecoverable in accounts for that previous year. This is apparent from language used by Legislature prior to 1-4-1989 which provided 'any debt or part thereof which is established to have become bad in previous year'. So if assessee had written off debt in one year but assessee was not able to prove that it had also become bad in that year, Assessing Officer could disallow same. Consequently, it could not be allowed in subsequent year, as it could not be written off in such year. Reference can be made to judgment of Hon'ble Supreme Court in case of R.B. Seth Champalal Ram Swarup v. CIT [1968] 68 ITR 181, wherein it was held that claim of bad debt could not be allowed as such debt had become bad in earlier years. This legal position created hardship to honest taxpayers. In order to avoid this hardship that section 36(1)(vii) was amended with effect from 1-4-1989. Now, after amendment, assessee is not required to prove that debt has become bad in year of write off. If debt had become bad in earlier years but could not be claimed as deduction, same can be allowed in other year in which such bad debt is written off. So after amendment, assessee is relived of proving factum of debt becoming bad in year of write off. But this does not mean that assessee is relieved of proving that debt has become bad. year in which debt has become bad is no more relevant after amendment. Therefore, Hyden's Mischief Rule is applicable to later part of provisions of section 36(1)(vii) and not to first part. assessee is still required to prove that debt in respect of which claim is made has become bad whether in year of write off or in any of earlier years. 18. contention of assessee's counsel that if revenue's contention is accepted would create great hardship to assessee as it would not be able to write off in subsequent years cannot be accepted for two reasons - (i) hardship is self created by assessee by writing off debt which was not bad and (ii) hardship, if any, has to be remedied by Legislature and not by Court as held by Apex Court in case of Smt. Tarulata Shyam (supra). 19. above discussion would be incomplete unless we express our 19. above discussion would be incomplete unless we express our opinion on question as to when debt can be said to be bad. question whether debt has become bad or not, is question of fact and, therefore, answer of same would depend on facts and circumstances of each case. Various High Courts have considered such issues and decided same on facts of case before them. In our opinion, debt can be said to be bad when material on record shows that there is no possibility of recovery. No doubt, onus is on assessee but assessee is not required to prove beyond doubt that no recovery is possible. If there are some materials on record on basis of which prudent businessman may form honest or bona fide belief that there is no possibility of recovery, that would be sufficient for writing off same as bad debt. crucial observations have been made by Hon'ble Bombay High Court in case of Jethabhai Hirji & Jethabhai Ramdas (supra). same are being reproduced for benefit of this order: 'As to when debt becomes bad depends upon circumstances and materials brought on record and there is no general rule or universal test which will apply to all cases and in all circumstances. department cannot insist on demonstrative proof of fact which must satisfy test of infallibility. All that is required is honest judgment on part of assessee at time when he makes write-off. debt cannot be written off as bad and irrecoverable if on material available it could be shown that there was possibility of recovering same. That company has not yet gone into liquidation will not by itself establish such possibility. That assessee wrote off debt at particular point of time or in particular year is not conclusive of matter, but is not wholly or totally irrelevant. This will be material circumstance unless it can be shown or established from materials on record that write-off was not proper or bona fide. That this was so can be established even by reference to subsequent conduct of assessee from which it is possible to infer definitely that assessee still considered debt or at least part thereof as recoverable or regarded debtor as financially solvent. fact that assessee had not taken steps by way of legal proceedings against debtor would not automatically justify finding that he was not entitled to write off amount of bad debt. Nor would fact that assessee, subsequent to write-off debt, continued legal proceedings against debtor necessarily land to conclusion that write-off was improper or lacked bona fides. These would be factors to be taken into account in order to arrive at proper determination of question. Mere notices served for winding up debtor company or lunching criminal prosecution or including other authorities to launch criminal prosecution against debtor-company or its directors cannot be regarded as equivalent to taking steps for recovery of amount.' Similar views has also been expressed by Hon'ble Gujarat High Court and case of Kamla Cotton Co. v. CIT [1997] 226 ITR 605, Hon'ble Madras High Court of Devi Films Ltd. v. CIT [1963] 49 ITR 874, Calcutta, Hon'ble High Court in Dunlop India Ltd. (supra). Not only we are bound by decision of Hon'ble Bombay High Court, but in our opinion also view taken by Hon'ble Bombay High Court is most reasonable view on this aspect of matter. So, whenever such issue comes before Bench, above observation of Hon'ble Bombay High Court would be guiding factor in adjudicating matter. 20. Before parting with this order, we would like to deal with objection of Mr. Pardiwala that order of Tribunal in case of Anil H. Rastogi (supra) is binding on this Bench as Third Member opinion is equivalent to decision of Special Bench. We are unable to agree with contention. Special Bench decision is collective decision which has always more weightage than separate opinions given by different Members at different point of time. Similarly, as per provisions of Act, Third Member expresses his opinion which is binding on regular Bench which decides case finally. Such final order is of two Members only. Therefore, in our humble opinion, such decisions by Bench of two Members, though guided by third Member opinion, cannot be binding on Special Bench. judgment of Hon'ble High Court relied on by him is persuasive only and not binding on us in view of decision of Hon'ble Bombay High Court in case of CIT v. Thana Electricity Supply Ltd. [1994] 206 ITR 727. For reasons mentioned above, we are not persuaded by view of Hon'ble Delhi High Court. Even presuming that Third Member view is akin to decision of Three Members, still Co-ordinate Bench of three Members can deviate from such decision where Third Member had expressed his opinion without reference to settle legal position expressed by Hon'ble Supreme Court as reference to settle legal position expressed by Hon'ble Supreme Court as held in case of Union of India v. Raghubir Singh [1989] 178 ITR 548 (Constitution Bench). cardinal rule of interpretation, as discussed by us, was neither raised by any party nor considered by Bench in case of Anil H. Rastogi (supra). said Bench had completely ignored effect of word 'bad' which, in our opinion, could not be done in view of cardinal rule of interpretation. Hence, said decision cannot bind Special Bench. 21. In view of above discussions, it is held that mere writing off debt is not sufficient for claiming deduction under section 36(1)(vii) of Act effective from 1-4-1989. In addition, assessee is also under obligation to show, at least prima facie, that debt has become bad. Whether debt has become bad or not would depend on facts of each case. observations of Hon'ble Bombay High Court in case of Jethabhai Hirji & Jethabhai Ramdas (surpa), would be guiding factor for determining such question of fact. 22-23. matter will now go to regular Bench for decision on merits. Per G.E. Veerabhadrappa (Vice President) & Dr. O.K. Narayanan (Accountant Member. 24. We have had privilege of going through order proposed by our esteemed brother, Shri K.C. Singhal, learned Judicial Member. We have also had discussions and deliberations on issue before us. In spite of our best efforts, we are unable to convince learned Judicial Member on our reasoning and are also unable to be convinced by his reasoning and conclusion thereon. We, therefore, record our dissent in following manner. 25. We agree with discussions in proposed order as regards question before us, arguments that are advanced by parties who appeared before us and we also agree with his view that whether debt is actually become bad or not would entirely depend upon facts of each case. But we do not agree with him that post-1989 amendment assessee is further required to show that debt written off by him is indeed bad debt for purpose of allowance under section 36(1)(vii) of Act. 26. provisions relating to bad debts as are in shape today have interesting history and are to be deliberated upon before we draw into any meaningful conclusion of what they intend after amendment with effect from 1-4-1989. For long time, assessee in business had choice as regards method of accounting, either to follow cash system, or mercantile system. When cash system of accounting is followed revenue is not realized till realization takes place in cash. In other words, if goods are sold on credit it will not be regarded as sale and accounted till cash is actually realized. In that situation question of claiming any bad debt or allowing same as deduction did not arise. dispute of type before us arose only when assessee chose to maintain method of accounting on mercantile basis where assessee has to account for credit sales as revenue receipts he was faced with incidental loses of business in form of non-realization of such credit sales. accountants started writing off such unrealizables as bad debts to profit and loss account. 27. claim for deduction of bad debts so written off was considered even when there was no provision in Income-tax Act specifically granting such deduction. In CIT v. Chitnavias (1932) 6 ITC 453, Privy Council observed 'Although Act nowhere in terms authorizes deduction of bad debts of business, such deduction is necessarily allowable. What are chargeable to Income-tax in respect of business are profits and gains of year and in assessing amounts of profits and gains of year account must necessarily be taken of all losses incurred. Otherwise you would not arrive at true profits and gains'. 28. For first time specific provisions were made regarding deduction of write off of bad debt in year 1939 by Income-tax (Amendment) Act, 1939, which introduced provisions of section 10(2)(xi) to 1922 Act, which read as under: '(xi) when assessee's account in respect of any part of his business, profession or vocation are not kept on cash basis, such sum, in respect of bad and doubtful debts, due to assessee in respect of that part of his business, profession or vocation and in case of assessee carrying on banking or money-lending business, such sum in respect of loans made in ordinary course of such business as Income-tax Officer (now Assessing Officer) by estimate to be irrecoverable but not exceeding amount actually written off as irrecoverable in books of assessee: Provided that if amount ultimately recovered on any such debt or loan is greater than difference between whole debt or loan and amount so allowed, excess shall be deemed to be profit of year in which it is recovered, and if less, deficiency shall be deemed to be business expense of that year . . . .' 29. Under 1922 Act though debt was bad debt, Assessing Officer could refuse to grant allowance therefore, on ground that debt in question had become bad in earlier year. In such event assessee found himself unable to ask for relief in respect of bad debt in earlier year. Assessing Officer could also refuse to grant allowance on ground that debt had not yet become bad in accounting year and that assessee's claim was premature; and, when such later year arrived, though assessee could repeat his claim, it was possible for Assessing Officer to hold in such later year, though inconsistently, that debt had already become bad in earlier year, and he could therefore, refuse to grant relief in such later year. decisions on subject were not uniform leading to inconsistent treatment by different Assessing Officers. result was that assessee was put to great hardship, inasmuch as he was denied relief altogether. Attempts were made from time to time to reduce this hardship, wherein Assessing Officer is required under provisions of section 155 of Act to make amendments on his decision on bad debt and also to make necessary corrections and adjustments. 30. 1961 Act, which consolidated law on subject, indicated following provisions in section 36(1)(vii) of Act: '(vii) subject to provisions of sub-section (2), amount of any debt, or part thereof, which is established to have become bad debt in previous year was allowable as deduction in computing income chargeable to tax under head 'Profits and gains of business or profession'.' allowance of deduction under section 36(1)(vii) also depended upon condition spelt out in section 36(2) of Act. provisions of section 36(2) of Act have also been amended by Direct Tax Laws (Amendment) Act, 1986 with effect from 1-4-1989. However, we are not seriously concerned with t h e amendment in section 36(2) of Act. However, litigations and controversies as also hardships to assessees continued on various points even post 1961 period. Therefore, Direct Tax Laws (Amendment) Act, 1987 with effect from assessment year 1989-90 has further liberalized requirement of writing off of debts by assessee by altogether doing away with condition precedent of satisfaction of Assessing Officer in writing off bad debt, which used to lead to enormous litigations. amendment provisions provide that claim of bad debt will be allowed in year in which such bad debt has been written off as irrecoverable in accounts of assessee for previous year. amended clause with effect from 1-4-1989 now reads as under: '(vii) subject to provisions of sub-section (2), amount of any bad debt or part thereof which is written off as irrecoverable in accounts of assessee for previous year. . . .' 31. comparison of these provisions show that in pre-amended provision assessee was required to establish that debt in question has become bad in previous year. In post amended period it is sufficient if bad d e b t or part thereof is written off as irrecoverable in accounts of assessee. What is effect of substitution made by Direct Tax Laws (Amendment) Act, 1987 in matter of deductibility of bad debt is core issue. In our view law has done away of onerous obligation on part of assessee to establish that debt has become bad in previous year. Now requirement is only write off of such debt as irrecoverable in accounts of assessee. 32. Central Board of Direct Taxes in its Circular No. 551 dated 23-1- 1 9 9 0 [183 ITR (St.) 37)] has explained object and ambit of amendment in following manner: '6.6 Amendments to section 36(1)(vii) and 36(2) to rationalise provisions regarding allowability of bad debts.-The old provisions of clause (vii) of sub- section (1) read with sub-section (2) of section laid down conditions necessary for allowability of bad debt. It was provided that debt must be established to have become bad in previous year. This led to enormous litigation on question of allowability of bad debt in particular year in which same had been written off on ground that debt was not established to have become bad in that year. In order to eliminate disputes in matter of determining year in which bad debt can be allowed and also to rationalise provisions, Amending Act, 1987 has amended clause (vii) of sub-section (1) and clause (i) of sub-section (2) of section to provide that claim for bad debt will be allowed in year in which such bad debt has been written off as irrecoverable in accounts of assessee.' 33. Prior to amendment explained above, assessee had to establish that debt has become bad during previous year and Assessing Officer may allow or disallow claim in terms of section 36(2) on basis of his observation whether debt has become bad during said previous year or not. In other words, irrespective of write off claimed by assessee, deduction was still dependent on finding of Assessing Officer that in which previous year debt has become bad and based on which Assessing Officer could allow deduction either in earlier assessment year or in later assessment year which is different from assessment year in which assessee has written off debt as bad debt. As explained by above circular, amendment has been brought to do away with all complications involved in determining issue of deducibility of bad debts under section 36(1)(vii). amendment decided year in which deduction has to be allowed; as year in which assessee has written off debt as bad debt in books of account. amendment has also done away with requirement of establishing that debt has become bad. This is clear from circular of Board where it is stated that amendment has been brought to eliminate disputes in matter of determining year in which bad debt can be allowed and also to rationalise provisions. Even after amendment, if assessee is again called upon to establish that debt has become bad, true spirit of amendment will not be fulfilled. intent and purpose of amendment is to avoid litigations and do away with all sorts of disputes regarding allowability of bad debts as deduction in computing income of assessee. dispute regarding year in which debt has to be allowed as deduction has been resolved by clear statement of amended law that deduction shall be allowed in year in which debt has been written off as irrecoverable. It is very important to note that earlier expression 'any debt, or part thereof, which is established to have become bad debt in previous year' has been conspicuously omitted by amendment and substituted by expression 'written off as irrecoverable'. words of law are clear and intent and purpose of amendment are manifest. earlier rule of establishing that debt has become bad is omitted from provisions of law. Therefore, there is no occasion or provocation to consider whether assessee has again to establish that debt has become bad. In fact, there is no provocation at all to go to that extent of discussion because amendment has omitted expression 'debt which is established to have become bad debt'. We are of view that when amendment has been brought to cure defect and amendment has omitted expression which has made way for such defect there is no reason to ponder over past and to decide matter still under law stood prior to amendment. 34. apprehension expressed by learned standing counsel for Revenue was that if assessee was permitted to stake claim for deduction on basis of writing of debt as bad, then assessee can write off any debt as bad and claim deduction in year in which it has high amount of profit and can offer bad debt as income under section 41(1) in assessment year in which assessee has suffered loss. apprehension is only remote possibility or hypothesis. Supreme Court in case of Surat Art Silk Cloth Mfrs. Association (supra) has held that consequences of suggested construction cannot alter meaning of statutory provision where such meaning is plain and unambiguous but they can certainly help to fix its meaning in case of doubt or ambiguity. above observation of Supreme Court has been reiterated by court in case of CIT v. J. H. Gotla [1985] 156 ITR 323. 35. Another argument made out by Revenue is that what is to be written off as irrecoverable is 'bad debt or part thereof' and not 'any debt or part thereof'. According to Revenue, presence of adjective 'bad' still requires that assessee should establish that debt written off as irrecoverable is in fact 'bad'. In our opinion, adjective 'bad' is prefixed to word 'debt' only to focus in broad manner nature of deduction entitled for under section 36(1)(vii). It is obvious that debt which has not become bad is not entitled for deduction. Therefore, there is no justification in using expression 'any debt or part thereof' written off as irrecoverable to justify deduction. If so, would be surprisingly wrong expression. debt which is not bad is not allowed as deduction at all. Any debt or part thereof which is not bad cannot be claimed as deduction even if written off as irrecoverable. Therefore, it has become necessary for Legislature to qualify debt which would be entitled for deduction in computing taxable income. It is for that purpose of identifying or qualifying debt that adjective 'bad' has been prefixed to word 'debt' in section 36(1)(vii). presence of expression 'bad' does not lay down any rule of evidence or onus of proof. expression 'bad debt' always goes along with second limb of provision that is 'writing off as irrecoverable'. Therefore, presence of expression 'bad' has to be read in normal sense without attributing any unintended implication and, therefore, it is to be held that expression 'bad debt' does not mean that assessee should establish that debt has become bad. On other hand, it only qualifies that debt which is entitled to be deducted if written off as irrecoverable. 36. act of writing off debt as irrecoverable in accounts of assessee is deemed to be discharging onus of assessee in holding debt as bad. When statute has provided mode of discharging onus of proof by writing off debt as bad debt, it is not incumbent on Revenue to call for further evidence. rule regarding deductibility of bad debt provided in section 36(1)(vii) after amendment is statutory rule by itself and, therefore, there is no need for insisting any other proof. Statutory rule itself declares rule of deduction of bad debt. If it is again necessary to prove by demonstrative proof that debt has become bad, then there is no necessity to insert statutory rule. onus of proving debt as bad debt has been prescribed by statutory rule. Once that statutory rule is satisfied by following prescribed method no further obligations remain on assessee to be discharged. 37. Hon'ble High Court of Bombay in case of Lords Dairy Farm Ltd. v. CIT [1955] 27 ITR 700 has observed that when businessman writes off amount, there is prima facie evidence that amount is irrecoverable. It is for t h e Revenue to rebut prima facie inference by citing circumstances or leading evidences to rebut stand of assessee to prove that debt was in fact not bad. This position has been reiterated again by Bombay High Court in case of Jethabhai Hirji and Jethabhai Ramdas (supra). Madhya Pradesh High Court in Johilla Coal Fields (P.) Ltd. (supra) and Gujarat High Court in CIT v. Sarangpur Cotton Mfrs. Co. Ltd. (supra) have taken analogous view. scope and extent of provisions of law contained in section 36(1)(vii) after crucial amendment have been considered by various benches of Income-tax Appellate Tribunal in series of appeals. issue was considered for first time by ITAT, Calcutta Bench 'D' in case of Paks Trade Centre (supra). argument raised before Tribunal was that expression 'bad debts' still remained in provisions of law contained in section 36(1)(vii) even after amendment, it is for assessee to prove that debt has become bad. Tribunal after considering intent and scope of amendment and relevant circular issued by CBDT held that deduction could not be allowed in any other year other than year of write off and Tribunal accepted contention of assessee that it is sufficient on part of assessee to claim deduction to write off debt as irrecoverable in books of account during relevant previous year. Allahabad Bench of ITAT adopted analogous view while deciding issue in case of Pradeshiya Industrial & Investment Corpn. of UP Ltd. (supra). Tribunal stated therein that what is necessary is to write off debts as irrecoverable in books of account of assessee. Again, ITAT, Calcutta Bench 'B' in case of Jayanti Commerce Ltd. (supra) held that only pre-condition for writing off debt is that assessee should bona fidely believe that debts are not recoverable and no other evidence is called for. ITAT, Bangalore Bench in case of Wipro Information Technology Ltd. (supra) held same view that it is objective satisfaction of assessee what is to be considered in determining whether debt written off as bad is in fact bad or not and assessee need not have to prove that debt has become bad in relevant previous year of write off. Tribunal held therein that if assessee is still required to prove that debt is bad even though it is written off same in accounts, then controversy whether debt has become bad or not in relevant previous year would still continue and effect of amendment would be nullified. This principle has been reiterated by ITAT, Bangalore Bench in case of K. Raheja Development Corpn. Ltd. (supra) and held that if and when assessee wrote off debt it was under bona fide belief that debt was bad and amount written off has to be allowed as deduction. Delhi Benches of Tribunal in cases of Shobanlal Jain (supra) and Cat Vision Products Ltd. (supra) have adopted similar view. ITAT, Chennai Bench 'A' in case of Newdeal Finance & Investment Ltd. (supra), has followed same view taken by Tribunal discussed hitherto. Tribunal held therein that best judge to decide as to whether debt ought to be written off or not is assessee and not Assessing Officer. Tribunal observed that once assessee is satisfied that debt has become bad and it has passed necessary entries in books to write off debt in its profit & loss account, then assessee could not be called upon to prove that debt has become bad. 38. As seen from decisions mentioned in paragraphs above, consistent view taken by Tribunal is that amendment has diluted rigours of test of proof in matters of establishing debt as bad debt and consequent claiming of deduction by incorporating statutory rule that claim could be made by assessee and Assessing Officer has to allow claim in year in which it has been claimed on basis of writing off debt in books of account. parity/compatibility between writing off debt as irrecoverable in books of account and claim of deduction as bad debt to be allowed in hands of assessee, has been made out by cognisizing both, to be events of very same previous year. 39. above consistent view taken by various benches of Tribunal has been later confirmed by Third Member decision of ITAT, Tribunal has been later confirmed by Third Member decision of ITAT, Mumbai Bench 'B' in case of Anil H. Rastogi (supra). In that case, assessee, individual was engaged in business of trading in optical frames and lenses and he was also doing money-lending business. assessee had advanced certain sum to one 'S' in relevant previous year. At time of closing his books of account, assessee written off said advance as irrecoverable debt and claimed it as bad debt. Assessing Officer, however, added back said amount on ground that assessee had written off debt within very short period. On appeal, Commissioner of Income-tax (Appeals) deleted disallowance on ground that after amendment to section 36(1)(vii), there was no need for assessee to establish as to what steps had been taken for recovery and writing it off as irrecoverable debt was sufficient. On appeal filed by revenue, Accountant Member upheld finding of CIT(A) while Judicial Member held that even after amendment, it was necessary for assessee to prove that debt has become bad in year in which it was written off. On difference of opinion, Third Member, who was Vice President as well as Judicial Member agreed with view taken by Accountant Member and held that there is no obligation for assessee to place demonstrative proof for establishing it as bad, if he has taken steps to write it off in previous year, left to his prudence and it is sufficient compliance for claiming debt as bad debt under section 36(1)(vii). Third Member has held as follows: 'It is clear from substitution itself before amendment by Finance Act, 1987 with effect from 1-4-1989 in section 36(1)(vii), words used were 'any debt, or part thereof, which is established to have become bad debt in previous year'. words 'any debt, or part thereof, which is written off as irrecoverable in accounts of assessee for previous year' have been inserted by amendment. It is clear from substitution itself that intention of Legislature was to leave it to prudence of businessman to judge himself as to whether particular debt has become irrecoverable or not. Previously, words used were 'any debt, or part thereof, which is established to have become bad'. It was significant in sense that it was obligatory for assessee to prove or show with demonstration that such debt had become bad. By taking away words 'which is established to have become bad', intention of Legislature is clear that it did not want to burden assessee to prove that debt has become bad. It is left to prudence and judgment of business-man to consider it as bad and irrecoverable debt and write off same in his books of account. If he writes it off as irrecoverable in his accounts of previous year, it is sufficient compliance for claiming debt as bad debt under section 36(1)(vii). onus is of course on assessee to show that he has written off debt which is permissible under amended provisions. 40. Third Member decision mentioned above places dispute at rest. In fact, Third Member decision of Tribunal in case of Anil H. Rastogi (supra) is de facto decision of larger Bench. Delhi High Court in case of P.C. Puri v. CIT 151 ITR 584 has observed as follows: 'There is no difference, really speaking, between Full Bench of three Judges sitting together and this method of referring to third Judge in case of difference of opinion between two Judges. Whether first method is adopted or second, 'opinion of majority' will be decisive. In this case, there is formal reference to third Judge to ascertain his opinion. He is deciding voice. He turns scales. third Judge is Full Bench. Not alone. But along with two others, who first heard case. Whether three Judges sit at same time or at different times - two at one time and third hearing matter later on difference of opinion - does not make much difference.' 41. If above principle laid down by Delhi High Court is to be followed, majority decision handed out in case of Anil H. Rastogi (supra) is decision to be reckoned by Special Bench in adjudicating this issue. 42. Revenue has placed heavy reliance on decision of Bombay High Court in case of General Insurance Corpn. of India (No.2) (supra). In fact said decision of Bombay High Court does not go to help case of revenue. court has made it clear at outset itself that question as to whether debt has become irrecoverable has not been raised in appeal before it. only dispute raised before court was whether assessee has complied with statutory conditions for writing off debts. So far as requirement of writing off is concerned, court observed that language used in Indian Income-tax Act, 1922 and Income-tax Act, 1961 is identical. court observed that if debit entries posted by assessee indicated that bad debt has been written off as irrecoverable in account of assessee, then statutory condition stands fully complied with. That if assessee has posted entries in profit & loss account and corresponding entries are posted in bad debt reserve account, it would be sufficient compliance of statutory provisions of requirement for writing off as irrecoverable concerned debt in books of assessee. In that case, assessee had posted entries in profit & loss account and had made corresponding entries in bad debt reserve account. dispute was regarding mode of writing off bad debt as irrecoverable in books of account of assessee. In that case, passing of corresponding entries in bad debt reserve account has been held by High Court as full compliance with requirement of provisions of section 36(1)(vii). On page 209, observation made by High Court has titled towards argument made by assessee in present case. In placetum 'D' & 'E', court has held as follows: '. . .In case of Vithaldas H. Dhanjibhai Bardanwala v. CIT [1981] 130 ITR 95, Division Bench of Gujarat High Court has held that under section 36 of Act, before any claim for allowance for bad debt is held established by Assessing Officer, it must appear that concerned bad debt was written off as irrecoverable in account books of assessee. This requirement is condition for grant of claim for bad debt allowance. To that extent, there is departure from earlier Act.' 43. Before parting with, we may record that we have serious reservation o n line of discussions and conclusions in paragraph 20 of order of learned Judicial Member. At page 744 of judgment in Thane Electricity Supply Ltd. (supra), opinion of High Court was that decision of one High Court is not binding on another High Court. High Court appreciated possibility of conflict of opinion between two different High Courts on same questions of law and, therefore, Legislature has provided for clear mandate in section 260 of Act to refer questions of law in case of such conflicts. High Court further observed that it will amount to abdication of its duty by High Court further observed that it will amount to abdication of its duty by High Court to give 'its decision' on point of law referred to it if it were only to follow decision of another High Court. In this context Their Lordships of Bombay High Court observed that decision of one High Court is not binding on another High Court. But when it came to other proposition of law, Their Lordships have reiterated proposition laid down by them which is reported at page 738 of same judgment. It is recorded in that proposition that decision of High Court outside its territorial jurisdiction may at best have only persuasive effect. decisions of Gujarat High Court and Delhi High Court, which have been relied upon by us elsewhere in this order, have been considered in that spirit only, within framework of principle laid down by Jurisdictional High Court in Thane Electricity Supply Ltd. (supra). Third Member decision in case of Anil H. Rastogi is as good as Special Bench decision within territorial jurisdiction of Bombay High Court as there being no contrary view expressed by Bombay High Court on issue in question. It will be laying down wrong precedent if Third Member decision in case of Anil H. Rastogi is slighted by any other Division Bench as not being bound. 44. In our view, sanctity of Third Member decision and Special Bench decision is of same nature as viewed by Delhi High Court in case of P.C. Puri (supra). Even on this issue there is no binding precedent of Jurisdictional High Court, it may be stated. 45. Yet another important factor, which has bothered our mind is facts i n case of Oman International Bank. In this case, facts show that assessee chose to write off bad debt of Rs. 4,59,60,393 in terms of section 36(1)(vii) of Act. Assessing Officer disallowed sum of Rs. 92,96,000 representing debts written off in respect of amounts due from Mysore Timber Mart of Rs. 81,44,000 and Overseas Commercial (P.) Ltd. of Rs. 11,52,000. Insofar as debt due from Mysore Timber Mart is concerned assessee-bank had sanctioned credit facility in February 1990 and to secure itself had also obtained hypothecation of certain current assets. In order to enforce recovery, assessee-bank had sold timber logs, which were hypothecated with itself, and adjusted sale proceeds against amount due to it. debt thereafter remaining outstanding was written off in previous year relevant to assessment year 1994-95 as bad debt. At same time, assessee- bank filed suit for recovery of same. Similarly, assessee-bank had sanctioned temporary overdraft to Overseas Commercial (P.) Ltd. in April 1991, which remained unpaid in spite of continuous follow-up action. bank has not obtained any sort of security in respect of overdraft facility extended in course of its banking business. assessee-bank written it off in previous year relevant to assessment year under consideration. It must be appreciated that these amounts were written off in books of account after due approval of competent officials of assessee-bank. All these indicate bona fide decision on part of bank to treat amounts as irrecoverable. In fact, records show that assessee was not able to recover anything out of disputed amounts till appeal was decided by CIT(A). It is not case of department that assessee had recovered any money out of these disputed amounts despite write off in year 1994. bona fides of assessee in facts and circumstances of case can never be questioned without bringing any material to show that write off was mala fide with intention to have tax advantage. Assessing Officer made no attempts in these directions. requirement on part of assessee to prove that debt has really become bad will only annex obligation which is not spelt out in so-called clear provisions of amendment brought out with effect from 1-4-1989. accounts of assessee are subject to audit which means that board, general body of shareholders and statutory auditors have confirmed that decision to write off is bona fide charge on profit and loss account. There is no qualification in auditors report to say that write off was not business consideration, which only strengthened that what has been written off to profit and loss account is bad debt and can be duly established so with all attended circumstances. Asking for any demonstrative evidence or proof will only seem to be doing violence to provisions contained in Act and wanting assessee to do same act, which were specifically omitted to be done by Amending Act. 46. We may further examine issue from another angle. If for any reason revenue's contentions were to be accepted that write off is not bona fide and debt has not become bad in previous year in which debt is so written off, assessee will only get denied its rightful deduction in year of write off and in any subsequent year when department reaches conclusion that debt has actually gone bad, he will loose deducibility of same forever because even amendment in section 36(2)(iii) & (iv) which required rectification under section 155 of Act are not applicable to post amended period. In other words, assessee looses deduction itself. That is not intention of rationalization of provisions of section 36(1)(vii) of Act. That will only mean putting additional burden and conditions, which are not spelt out in amendment. 47. apprehension of revenue that this sort of write off will only result in good debts being written off as bad is unfounded. Whenever there is recovery of amounts so written off, revenue has always means to bring it to tax under section 41 of Act, whereas assessees were to loose deduction if to follow line of arguments of revenue. This must be kept in mind before our conclusion. 48. Now coming to expression 'bad debt' in section 36(1)(vii), it may be pointed out that strict proof of establishing debt to have become bad is unnecessary if we were to look to plain meaning of term 'bad debt'. According to Chambers 20th Century Dictionary 'a bad debt' means debt that cannot be recovered. According to Mitra's Legal & Commercial Dictionary debt becomes bad when creditor has no reasonable chance of recovering it from debtor. In Law Lexicon, definition is that debt that is not reasonably collected, debt about which there is no reasonable expectation of recovery, debt believed to be unrecoverable. It is within personal knowledge of businessman whether debt has become bad or not. His decision as long as it is bona fide cannot be disputed by demanding from him demonstrative proof to establish that debt has actually become bad. write off of bad debt, according to us, is prima facie evidence, on part of assessee with whom information rests, and is sufficient requirement of amended provision. 49. In light of majority view question is answered in negative and in favour of assessee. 50. matter will now go to regular Bench for passing order in conformity with majority decision on question referred to Special Bench. other disputes in case of Spectrum Business Support Ltd. shall also be decided on merits. *** DEPUTY COMMISSIONER OF INCOME TAX v. OMAN INTERNATIONAL BANK SAOG