Non Trading bad debts can not be allowed in computing taxable Income of the Assessee

The appellant has purchased debts of amount due to Rose Patel Mercantile Co. Ltd. for Rs.10,85,000/- by paying the said amount on 10-1-1996 Rs. 5,00,000/- and on 29-1-1996 Rs. 5,85,000/-. The amount was due from Qualitron Components Ltd. Unfortunately due to losses the company closed down its operations and ultimately wound up by the order of Gujarat High Court. The Assessing Officer has clearly pointed out that the said debts of Rs. 10,85,000/- was not trading debt. Therefore the conditions specified u/s. 16(1)(vii) r.w.s. 36(2) is not fulfilled as the amount has not been taken into considera...