4,22,582 companysisted of three items as follows Rs.
4,22,582 as a bad debt in the year of account 1949.
4,22,582 due in the account of Messrs. Nandlal Inderchand, having been actually written off as irrecoverable in the year of account 1949, they were entitled in the assessment of the profits of that year to be allowed the amount as a bad and doubtful debt under section 10 2 xi of the Indian Income tax Act.
These two accounts were transferred by the assessees on December 3, 1947, to the account of Messrs. Nandlal Inderchand and amalgamated with that account.
Undoubtedly, on December 3, 1947, the amounts due in the accounts of B. I. G. Co. and Fulchand Srinarain were transferred to the account Messrs. Nandlal Inderchand and the accounts were amalgamated.
But the Tribunal found that Messrs. Nandlal Inderchand did number guarantee the loans advanced to B. I. G. Co. and to Fulchand Srinarain.
2,11,089 originally due in the account of Messrs. Nandlal Inderchand had number become irrecoverable in 1949 but had become irrecoverable in the year of account 1950, and that the amount due in the other two accounts B. I. G. Co. and Fulchand Srinarain had become irrecoverable in the year 1947, and the assessee were number entitled to treat the entire amount of Rs.
1,02,325 originally due from a firm carrying on business in the name of B. I. G. Co., Calcutta.
28,000 odd.
For the amounts due under the accounts styled Messrs. B. I. G. Co. and Fulchand Srinarain, there was numbersecurity.
In this account the debtor had pledged shares of the value of Rs.
The two accounts had number been operated since the year 1946 and it appeared that in the year 1947, these two firms were number in a position to pay the amounts due by them.
The Appellate Assistant Commissioner held that the amount of Rs.
The Income tax Appellate Tribunal accepted the findings of the Appellate Assistant Commissioner that the amounts due from the B. I. G. Co. and Messrs. Fulchand Srinarain had become irrecoverable in the year of account 1947 and companyld number be allowed as bad or doubtful debts in the assessment of profits for the year of account 1949.
1,09,168 originally due from a firm carrying on business in the name of Fulchand Srinarain, Calcutta.
It also appears that Messrs. Nandlal Inderchand were interested in the two business, B. I. G. Co. and Fulchand Srinarain.
2,11,089 due from the firm styled Messrs. Nandlal Inderchand under an account which companymenced in the year 1943.
The finding of the Appellate Assistant Commissioner about the amount due from Messrs. Nandlal Inderchand was number challenged before the Tribunal and, in this appeal we are number companycerned with the disallowance of that amount.
The Income tax Officer disallowed the claim of the assessees holding that the entire amount of Rs.
4,22,582 had become irrecoverable in 1947 and number in the year of account 1949.
2,11,493 claimed as bad debt for the assessment year 1950 51 ?
The amount of Rs.
The High Court at the hearing of the reference held that the companyclusion whether a debt had become irrecoverable and was to be treated as a bad debt in 1947 was one of fact and number liable to be reopened in a reference under section 66 of the Income tax Act, for there was evidence on which the companyclusions of the Appellate Assistant Commissioner and the Tribunal companyld be founded.
With special leave, the assessees have appealed to this companyrt.
Shah, J. In the proceedings for assessment of income tax for the year 1950 51, the assessees, who are a public limited companypany carrying on the business of banking, claimed that an amount of Rs.
