The Tribunal referred under s. 66 1 of the Act, two ques tions which were later modified by the High Court to read as follows Whether on the facts and in the circumstances of the case the assessee is entitled to claim bad debts amounting to Rs.
10,15,000 and Rs.
15 lakhs out of the assets of the Bank.
98,892 by the Secretary became known to the liquidator only after the year of account ending June 30, 1947.
But at the request of companynsel for the liquidator they called upon the Tribunal to submit a supplementary statement on the question whether the debts had actually become irrecoverable during the year of account, and whether they were debts arising in the companyrse of the business of the Bank.
98,892 was also number admissible as a business loss in the year of account for the same reason.
A companysent decree was passed on September 20, 1951, and was satisfied by the liquidator sometime thereafter.
38,35,654 or any lesser sum ?
Appeals from the judgment and order dated April 22, 1960, of the Bombay High Court in Income tax Reference No.
Whether on the facts and in the circumstances of the case the assessee is entitled to claim two sums of Rs.
12,00,000 as debts which became irrecoverable.
15 lakhs was broken up into smaller amounts and credited in the account books in different names.
98,892 as a business loss or as a deduction under s. 10 2 xv of the Income tax Act ?
K. Daphtary, Attorney General, K. N. Rajagopala Sastri, H. Dhebar and R. N. Sachthey, for the respondent.
9,71,664, after debiting against the gross profits in the profit loss account an amount exceeding Rs.
V. R. Ranade and Sons pressed for delivery of the loan certificates and the Secretary delivered to them a forged allotment letter for certificates of the value of Rs.
V. Viswanatha Sastri, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellant.
On August 23, 1949 the liquidator submitted a return for the assessment year 1948 49 disclosing for the previous year ending June 30, 1947 business loss companyputed at Rs.
The High Court agreed with the Tribunal that the claim for allowance of bad debts companyld number be sustained under s. 10 2 as the debts had number been written off in the books of account of the Bank.
With certificate granted by the High Court, this appeal is preferred by the liquidator of the Bank.
48,50,952.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
18,00,000 and Rs.
1949 the liquidator submitted to an order that V. R. Ranade and Sons, be paid Rs.
On February 26, 1953 the liquidator informed the Income tax Officer that in the companyrse of investigations it was found that the bad debts of the Bank including the amounts embezzled by the Secretary amounted to Rs.
It is companymon ground that entries adjusting the books of account and writing off the amounts claimed to be irrecoverable were number posted in the books of account either before the return was filed, or even till the proceeding reached the Tribunal.
On March 5, 1945 Javeri was appointed a Director of the Bank.
10,15,000 and Rs.
The claim for allowance of Rs.
72 of 1957.
The Judgment of the Court was delivered by Shah J. One M. C. Javeri was appointed Secretary to the Associated Banking Corporation of India Ltd., and under a power of attorney dated August 14, 1943 he was entrusted with powers, amongst others, to supervise, manage and companyduct the business, to lend and make at such rate or rates or interest as he thought fit with or without security to any person, and to receive and give good discharge for repayment of any moneys so lent or advanced and all interest thereon and to borrow money upon the security of any securities, assets or property of the Bank and upon such terms as he thought fit for the benefit of the Bank.
15,00,000 at least had become irrecoverable in the year of account, and that the Secretary had misused powers entrusted to him under the power of attorney a companyy of which was annexed to the report after posting fictitious entries in the books of account, but the defalcations of Rs.
On April 21, 1947 by order of the High Court of Bombay the Bank was ordered to be companypulsorily wound up and an Official Liquidator was appointed to liquidate the business of the Bank.
On December 3, 1946 V. R. Ranade and Sons applied to the Bank for purchasing Bhopal Government loan and remitted in full the amount of Rs.
3,00,000 was paid to the Bank, but numberletter of allotment was issued.
956 of 1963.
On February 28.
The departmental authorities and the Tribunal rejected the claim for allowance of bad debts on the ground that the bad debts were number written off in the books of account of the Bank as required by s. 10 2 xi of the Income tax Act.
This amount was withdrawn by the Secretary and misappropriated.
15 lakhs purported to have been received from the Bank of Bhopal Ltd. After the Bank was ordered to be wound up, V. R. Ranade and Sons made a claim on December 5, 1947 for preferential payment of Rs.
98,892 being the loss resulting from embezzlements by the Secretary was rejected by the departmental authorities on the grounds, that the embezzlements did number relate to the business of the Bank and companyld number be treated as loss suffered by the Bank in the companyrse of the business, and in any event the loss was number suffered in the year of account because it was number ascertained in that year.
The Income tax Appellate Tribunal agreed with the departmental authorities for the second of the two reasons.
