Appeal by special leave from the judgment and order dated 8th March, 1956, of the former Bombay High Court in I.T.R. No.
50,000 was taken by the respondent for purposes of its business and the rest by Kishorilal.
1,00,000 with interest.
The Commercial practice is to borrow money from banks on joint and several liability.
18,805 and claimed the balance, i.e., Rs.
Kishorilal however failed to meet his liability and became a bankrupt.
Out of the amount taken by Kishorilal the respondent received in the accounting year, from the Official Assignee, a sum of Rs.
Out of this amount a sum of Rs.
An illustration will explain what we mean.
This claim was disallowed both by the Income tax Officer as well as the Appellate Assistant Commissioner.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
At the instance of the Commissioner a case was stated to the High Court of Bombay by the Income tax Appellate Tribunal.
N. Kripal and D. Gupta, for the appellant.
The accounting year was from August 26, 1949 to July 17, 1950, the assessment year being 1951 52.
The respondent had therefore to pay the Bank the whole amount, i.e., Rs.
55 of 1955, in which two questions of law were stated for opinion and both were answered in favour of the assessee and against the Commissioner of Income tax who is the appellant before us and the assessee is the respondent.
1,00,000 from the Bank of India on a pronote executed jointly with one Kishorilal.
The facts of this case are these The respondent is a registered firm carrying on business as companymission agents in Bombay.
November 24.
In the judgment under appeal the learned Chief Justice said The finding of the Tribunal is clear and explicit that what the assessee was doing was number something out of the ordinary, but in borrowing this money on joint and several liability he was following a practice which was established as a companymercial practice.
31,740 as deduction.
A. Palkhivala and B. P. Maheshwari, for the respondents.
In the statement of the case which was agreed to by both parties the Tribunal said For the purpose of his business, he borrows from time to time money on joint and several liability from banks.
The Judgment of the Court was delivered by KAPUR, J. This is an appeal by special leave against the judgment and order of the High Court of Bombay in Income tax Reference No.
358 of 1958.
On September 26, 1949, the respondent borrowed Rs.
For purposes of its business it borrowed money from time to time from Banks on joint promissory numberes executed by it and by others with joint and several liability.
55 of 1955.
