JAGADISAN J.

The question that has been referred to us under section 66 of the Indian Income-tax Act is :

"Whether the sum of Rs. 65, 802, being part of the amount due from the Alwaye Textiles Ltd., as per decree of court and not realised is properly a trade debt allowable as a bad debt in the computation of the income for the assessment year 1952-53 ?" *

Somasundaram Mills Ltd., which will hereinafter be referred to as the assessee, is a private limited company incorporated under the Indian Companies Act. The company is carrying on business in spinning and weaving cotton yarn at Coimbatore. The assessee is also a partner in three registered firms of partnership, Messrs. Krishna Ginning Factory, Messrs. Somavilas Ginning Factory and Messrs. Sundaravilas Ginning Factory, holding 7/8, 8/12 and 1/12 shares in each of the three concerns respectively. In this reference, we are not concerned with any question relating to the share income of the assessee in these partnership firms. We are only concerned with the business activities of the assessee in regard to its own business as textile manufacturers. Between the years 1943 to 1945, the assessee sold goods (stock-in-trade) and