Assessee Company stood as guarantee by mortgaging its Land on behalf of borrower companies. On default by borrower companies assessee re-paid the loan amounts, but could recover only partial amount on settlement with borrowers. Assessee wrote off the balance unrecovered amount u/s. 36(2). The A.O disallowed the claim stating that the conditions of section 36(2) are not fulfilled as the assessee had not received any guarantee commission from the borrower. Held that, the entire transaction cannot be considered as a colourable device, as all the transactions were in the ordinary course of business undertaken with third parties through bank accounts and registered mortgage deeds spread over a period of 5 years. The balance written off though may not fulfill condition of section 36(2), but is allowable as business loss suffered in carrying out its ordinary course of business.  (AY. 2015-16)