Harbans Lal, J.

1. This is a reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter called "the Act "), and the following question of law has been referred to this court by the Income-tax Appellate Tribunal, Amritsar Bench (hereinafter called "the Tribunal"), vide its order dated June 30, 1973 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing the sum of Rs. 10,799 as a bad debt for the assessment year 1967-68 ?"

2. For the purpose of appreciation of the point of law in controversy, the relevant facts of the case may be summarised.

3. A firm under the name and style of Messrs. Jagat Ram Om Parkash, Bazar Ghantaghar, Amritsar, was brought into existence by a partnership deed dated February 7, 1963. Its business was the purchase and sale of shawls, yarn and woollen goods. The partnership comprised of the following six partners :

1. Shri Sham Dass Virmani;

2. Shri Shiv Parkash Khanna ;

3. Shri Om Parkash Khanna;

4. Shri Satish Parkash Khanna ;

5. Shri Narpinder Parkash Khanna; and

6. Shri Kulbhushan Khanna.

4. This firm was dissolved by the deed of dissolution dated May 11, 1965. This was necessitated becau