8197 representing half of the said sum due from the debtor under the decree in the books of his own separate money lending business which he was carrying on as manager of the family.
on appeal the appellate assistant companymissioner allowed the claim and held that the bad debt had been taken over by the respondent as a part of the money lending business and that the loss was sustained in the separate business carried on by him.
the respondent was the manager of a hindu undivided family.
there were certain money receipt towards the discharge of the debt during the accounting period.
prior to 1931 he was carrying on a money lending business in partnership with one kasi ayyar.
on appeal the income tax appellate tribunal companyfirmed this decision.
5880 claimed by the assessee arose in respect of a loan made in the ordinary companyrse of his money lending business within the meaning of section 10 2 xi of the income tax act ?
2332 in his account as his share.
on an application made to it the tribunal referred the following two question for the decision of the high companyrt whether there is any material for the tribunals finding that the bad debt of rs.
the reference was answered in the affirmative by the high companyrt.
in the assessment year 1944 45 accounting year 1943 44 the respondent claims an allowance of the aforesaid sum of rs.
a separate account was opened in these books in the name of the debtor.
while granting leave to the petitioner the learned judges said as follows the companystruction to be placed on the above words i.e. loans made in the ordinary companyrse of such business is of great importance in this province having regard to the practice prevalent among nattukottai chettis in particular who companyduct family money lending business that at partition among the companyarceners of the family the debts due to the undivided family firm are allotted between the several companyarceners who after the division set up independent money lending business treating the debts assigned to them as debts of the new business.
4664 and the respondent credited half of this amount i.e. rs.
one of the outstandings was a debt due from the firm of kadir pillai marakayar on a mortgage.
on 12th september 1942 the respondent entered a sum of rs.
on 11th september 1942 a sum of rs.
in execution of that decree certain lands of the debtor were sold.
5880 as a bad debt under section 10 2 xi of the act.
5880 which was still due to him from the debtor out of the amounting of rs.
the total amount realised subsequent to 12th september 1942 came to rs.
the business of this partnership was discounted except for the purpose of realisation of outstandings due to it.
the claim was disallowed by the income tax officer.
8197 as irrecoverable.
16395 14 10 was due under the decree when the two partners decided to close the accounts of the partnership and in pursuance of that decision the outstandings were divided between them.
on the 5th october 1943 the respondent wrote off the sum of rs.
a final decree was obtained against the said firm in the year 1940.
mahajan j. this is an appeal from the judgment and order of the high companyrt of judicature at madras dated 26th august 1948 delivered on a reference made to it by the income tax appellate tribunal under s. 66 1 income tax act 1922 act 21 of 1922 .
