I know Past Perfect rules and I have also read some questions here connected with this point, but I still doubt. “My telephone fell down and hit the wall yesterday. I thought that had been the end of it.” OR “I thought that was the end of it”? Can we use Past Simple here as the actions are almost simultaneous?
Using the past perfect here would be very strange. It would suggest that you thought it "had been" the end of it before the telephone "fell down and hit the wall", because it's for past-in-past, the past relative to the context. That context is the fall. The past simple is fine, and in fact really the only appropriate one of the main ways of expressing time for a verb. It doesn't require them to be simultaneous, just both in the past but without one being well before the 'main time' of the sentence(s).