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4. The Ground Nos. 5 & 6 are with regard to deletion of disallowance of bad debts written off in the sum of Rs.1,85,00,000/- by the ld. CIT(A).

4.1. We have heard rival submissions and perused the materials available on record including certain pages of the paper book which are relevant for adjudication of this issue before us. We find that the assessee is in the business of manufacturing and selling of high pressure seamless cylinders. The assessee had stated before the lower authorities that it had entered into joint venture with M/s. Mechvac Fabricators (I) Pvt.Ltd. in name and style of M/s. Racho Precision Engineering Pvt. Ltd wherein the assessee had held a stake of 62% and M/s. Mechvac Fabricators (I) Pvt. Ltd. held a stake of 38%. The then Managing Director of M/s. Mechvac Fabricators (I) Pvt. Ltd. was a technocrat in the field of precision engineering. M/s. Racho Precision Engineering Pvt. Ltd. was formed to take up specialized jobs of flow forming. It was further submitted by the assessee that it was facing stiff competition from China and export sales were suffering. To compete in the market, the assessee felt a need to change the product to a higher grade. With respect to the same, the assessee paid an advance to M/s. Racho Precision Engineering Pvt. Ltd. to provide a guaranteed supply of raw material i.e. thin wall high pressure pipes for cylinders. We find that the aforesaid primary facts stated by the assessee are not in dispute. The assessee submitted a letter dated 12/01/2016 before the ld. AO attaching a copy of the letter dated 12/08/2010 written by the assessee to Mr. Raj Chodankar. For the sake of convenience, the said letter dated 12/08/2010 addressed by the assessee to M/s. Racho Precision Engineering Pvt Ltd., is reproduced hereunder:-

Tel: (91-22) 2216 2344 /45 / 46, (91-22) 22154294 E-mail: in1oramacyIinders.in. www.ramacylirldes.ifl CIN:U281I3MH2004PTC 149620 August 12,2010 Racho Precision Engineering Private Limited D-112, TTC Industrial Area MIDC, Navi Mumbai - 400 706 Kind Attn: Mr. Raj Chodankar, MD Dear Sir, Sub: Advance against setting up of project Further to our Joint Venture Agreement and setting u of the Company, Racho Precision Engineering Pvt. Ltd., we would be advancing funds to you in the proportion of 62% by us i.e. Rama Cylinders Private Limited (RCPL) and 38% by 'Mechvac Fabricators (I) Pvt. Ltd., for setting up the project - for building the shed, purchase, and installation of various machines and equipment, deposits for increasing the power load etc. from time to tim e.
 As agreed, Racho would undertake the job -work of RCPL viz, reducing the wall size of tubes for the purpose of manufacture of CNG cylinders, as per requirements, on concessional rates.
 The amount advanced by us would be interest fee.
 This advance would be adjusted in future against job work of RCPL that would be undertaken by you in future.
We look forward to healthy and long-term association. Thanking you, For Rama Cylinders Private Limited Managing Director 4.2. We also find that M/s. Racho Precision Engineering Pvt. Ltd., had addressed a letter to the assessee on 14/08/2010 accepting to the jobs entrusted by the assessee to them on receipt of advances from the M/s. Rama Cylinders Private Limited assessee. For the sake of convenience, the said letter dated 14/08/2010 is reproduced hereunder:-
RACHO PRECISION ENGINEERING PVT. LTD.
0-112., TTC INDUSTRIAL AREA, NERUL NAVI MUMBAI - 400 706 (INDIA) TEL:022-276708 13. E-mail: racho.precision@rediffmail.com August 14, 2010 Rama Cylinders Private Limited 18 1, Maker Tower E Cuffe Parade Mumbai-400 005 Dear Sir, Req: Advance payments against new project With reference to your letter dated August 12, 2010, for making payments to us or on behalf of us, in respect of setting up of our project, we confirm as below: