In return, the said person agreed to procure the manufacturing licence under the provisions of the Industries Development and Regulation Act and a licence or permit for the release of foreign exchange necessary for the import of machinery, plant and equipment for the manufacture of fluorescent tubes.
The question referred to the High Court under Section 256 1 of the Income tax Act, 1961, reads at page 43 Whether, on the facts and in the circumstances of the case, the Tribunal was companyrect in holding that the sum of Rs.
Mohan Lal Vyas procured the manufacturing licence on December 5, 1961, but he companyld number procure a licence or permit for the release of requisite foreign exchange for import of machinery, plant and equipment.
60,000 paid to Shri Mohan Lal Vyas represented the trading loss of the assessment year 1964 65 ?
This appeal is preferred against the judgment of the Allahabad High Court see 1981 130 ITR 41 , answering the question referred to it in the negative, i.e., in favour of the Revenue and against the assessee.
The appellants accounting year relevant to the assessment year 1964 65 was the year ending April 30, 1963.
On appeal, the Appellate Assistant Commissioner agreed with the Income tax Officer and dismissed the appeal.
60,000 in the event of his failure to obtain the said licences and permits, the appellant filed a suit for recovery of the said sum being Original Suit No.
The suit was decreed ex parte.
Since the appellant companyld number import the machinery, the Government revoked the manufacturing licence as well.
According to the appellant, it proposed to expand its business to undertake the manufacture of fluorescent tubes.
The appellant, however, took numbersteps whatsoever to execute the said decree with the result that numberamount was recovered thereunder.
For that purpose, it sought the assistance of one Mohan Lal Vyas and paid to him, between July, 1961, and April, 1962, a sum of Rs.
It is on the above facts that the said deduction on account of bad debt was claimed.
In the assessment proceedings relating to the year 1964 65, it claimed a deduction of a sum of Rs.
The appellant is a partnership firm engaged in the business of manufacture and sale of miniature bulbs.
The Income tax Officer rejected the appellants claim.
The appellant says, it treated it as a bad debt and debited the said amount to the profit and loss account, on April 30, 1963.
He companymented on the fact that numberproceedings were ever taken for execution of the decree.
The appellants case was that inasmuch as there was a stipulation between it and Mohan Lal Vyas whereunder the latter undertook to refund the said sum of Rs.
106 of 1964 on the file of the Civil Judge, Kanpur.
60,000 as a bad debt.
The assessee filed a. further appeal to the Tribunal.
He found the .
60,000.
whole story doubtful.
It number claims the said amount as a business loss.
