Judgment :

Heard learned counsel on both sides.

In these appeals, we are concerned with Assessment Year 1990-1991 and Assessment Year 1993-1994. Prior to 1st April, 1989, every assessee had to establish, as a matter of fact, that the debt advanced by the assessee had, in fact, become irrecoverable. That position got altered by deletion of the word "established", which earlier existed in Section 36(1)(vii) of the Income Tax Act, 1961 [`Act', for short]. For the sake of clarity, we re-produce hereinbelow provisions of Section 36(1)(vii) of the

Act, both prior to 1st April, 1989 and post-1st April, 1989:

"Pre-1st April, 1989:

Other deductions.

36.(1) The deductions provided for in the following clauses shall be allowed in respect of

the matters dealt with therein, in computing the income referred to in section 28—

(i) to (vi) xxxx xxxx xxxx

(vii) subject to the provisions of sub-section (2), the amount of any debt, or part thereof,

which is established to have become a bad debt in the previous year.

Post-1st April, 1989:

Other deductions.

36.(1) The deductions provided for in the following clauses shall be allowed in respect of

the matters dealt with therein, in computing the income refe