The firm companysisted of two partners, Mohanlal Baginal and Sashmal Sobha Chand.
The Appellate Assistant Commissioner agreed with the Income tax Officer.
The facts found by the tribunal are found in paragraphs 11 and 12 of the statement.
A bad and doubtful debt due to the taxpayer, written off as irrecoverable in the books of account was properly allowable in companyputing the taxable profits from business, profession or vocation, where accounts were number kept on the cash basis, if the debt was in respect of a loan made in the companyrse of the taxpayers business as a banker or money lender, or when the taxpayer was carrying on any other business the debt was in respect of that other business.
2,68,385/ is right in law to the High Court of Madras for its opinion.
That firm became insolvent in April 1952.
Two minors, Ramniklal Sobhachand and Lakshmichand Sobhachand were admitted to the benefits of the partnership.
Section 10 2 xi of the Indian Income tax Act, 1922, as in force at the relevant time provided Such profits or gains shall be companyputed after making the following allowances, namely When the assessees accounts in respect of any part of his business, profession or vocation are number kept on the cash basis, such sum, in respect of bad and doubtful debts, due to the assessee in 807SupCI/71 respect of that part of his business, profession or vocation, and in the case of an assessee carrying on a banking or money lending business, such sum in respect of loans made in the ordinary companyrse of such business as the Income tax Officer may estimate to be irrecoverable but number exceeding the amount actually written off as irrecoverable in the books of the assessee, Provided Clause xi was in two parts.
The question referred was, therefore, answered in the affirmative and against the appellants.
The order of the Court was delivered by Shah, J. By our order dated July 29, 1969 we called for the light of the two branches of s. 10 2 xi of the Indian In companye tax Act, 1922.
The assessee firm then applied to the Tribunal to refer the following question to the High Court of Madras Whether on the facts and in the circumstances of the case the disallowance of the bad debt of Rs.
The supplementary statement to be submitted within three months from the date the papers reach the Tribunal.
The Tribunal will give opportunity to both the parties of being heard, but will restrict themselves to the ,evidence on the record.
Appeal by special leave from the judgment and order dated September 11, 1964 of the Madras High Court in Tax Case No.
We have number received a statement of case from the Tribunal.
Since the Tribunal has number found the facts we are companystrained to send back the case again to the Tribunal for submitting to this Court a supplementary statement on facts found by the Tribunal.
After receipt of the supplementary statement of case from the Tribunal the appeal was heard by J. C. Shah, K. S. Hegde and A. N. Grover, JJ.
In the books of account of the appellants which were main tained according to the mercantile, system there was a current sarafi account in respect of their transactions with the Bombay firm in which were credited the funds transmitted from Bombay in respect of their business transactions.
The Tribunal will submit the statement within three months from the date on which the papers reach the Tribunal.
The Judgment of the Court was delivered by Hegde, J. The appellant firm which will hereinafter be referred to as the assessee carried on business in drugs, chemicals, mercury, camphor and art silk yam as also in money lending, over a number of years.
He held that the debt .
did number arise, in the companyrse of the appellants business as chemists and druggists number in the companyrse of their money lending business.
The first Order of the Court remanding the case to the Tribunal was delivered by Shah, Ag.
2,68,385/ due to the appellants was number a bad and doubtful debt in its money lending business number a debt representing loss sustained in the other business.
It also found that the statement submitted by the tribunal was in adequate.
The case was twice re manded to the Tribunal.
The Bombay firm owed certain amount to the assessee.
The question referred was, therefore, answered in the affirmative and against the asses see.
in the return of income for the assessment year 1953 54 the appellants claimed allowance for Rs.
Hence by its order dated April 7, 1970, this Court directed the tribunal to submit a further statement.
Sobhachand, one of the partners of Bhojaji Sobhachand with 16 share in the profit and loss is the father of Seshmal, Ramniklal and Lakshmichand, partners of the appellants.
The Income tax Appellate Tribunal accordingly companyfirmed the order of the Appellate Assistant Commissioner.
949 of 1966.
The assessee thereafter applied to the tribunal under s. 66 1 of the Indian Income tax Act, 1922 to submit a statement of the case with the question whether on the facts and in the circumstances of the case the disallowance of the bad debt of Rs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
2633 9 3 2005 Cr.27,815 0 0Dr.
C.J., Ramaswami and A. N. Grover, JJ.
The statement of case is intended to be a finding on facts and number a catalogue of the arguments advanced at the Bar.
There were two partners of the firm Mohanlal Sagmal and Seshmal Sobhachand, and Ramniklal and Lakshmichand minors were admitted to the benefits of the partnership, each with 7/32 share in the profits.
In the opinion of the High Court the debt of Rs.
After receipt of the second supplementary statement of case from the Tribunal the appeal was finally heard by J. C. Shah, C.J., K. S. Hegde and A. N. Grover, JJ.
Sobhachand Amarchand, a partner of the Bombay firm, is the father of Seshmal, Ramaniklal and Lakshmichand and he was having sixteen percent share in the Bombay firm.
In the assessment of income tax of the appellant for the assessment year 1952 53, relevant to the account year Samvat 2008, the assessee claimed a deduction of Rs.
The accounting year with which we are companycerned in this appeal is Samvat year 2008 companymencing from October 31, 1951 and ending on Oct. 18, 1952.
1008 7 3 2007 Dr.2,02,823 12 3 2008 Dr.2,68,385 1 3 In the assessment for income tax of the appellants for the assessment year 1952 53 relevant to the account year Samvat 2007 all item of Rs.
The assessee had dealings for several years with a firm known as Bhojaji Sobhachand to be hereinafter referred to as the Bombay firm .
T. Desai, R. N. Sachthey and B. D. Sharma, for the respondent.
On a further appeal taken by, the assessee to the Income tax Appellate Tribunal, the tribunal companyfirmed the order of the Appellate Assistant Commissioner.
C. Chagla and B. R. Agarwala, for the appellant.
2,03,147 8 O in the, account of the, Bombay was disallowed by the Income tax Officer, but in appeal the amount was allowed.
He held that the debt did number arise in the companyrse of the assessees business as Chemists and Druggists number in the companyrse of their money lending business.
The Incometax Officer disallowed that claim holding that these transactions were mere accommodations which can have numberbearing to the regular business carried on by the assessee.
The appellants had for a long time business relations with a firm styled Bhojaji Sobhachand carrying on business at Bombay as importers of yam and also as agents and adathias.
2,68,385/ as bad debt due from the Bombay firm, incurred by that firm in the companyrse of business transactions.
C. J. M s Amarchand Sobhachanda firm registered under the Indian Income tax Act, 1922, carried on business at Madras in drugs, chemicals, mercury, camphor and silk yam and as money lenders.
The following is a table showing the balances at the end of the Samvat years 2003 Amount Interest At the end of the Samvat Year 2003 Cr.16,951 00 2004 Dr.1,02,188 4 5Dr.
181 of 1962.
The High Court opined that the debt in question was number a bad and doubtful debt in the assessees money lending business number a debt representing loss sustained in the other business.
483 1 9 2006 Cr.11,975 0 0Cr.
The appeal was originally heard by J. C. Shah, Ag.
Thereafter the present appeal was brought after obtaining special leave from this Court.
The Tribunal has set out in great detail the arguments advanced before it by the assessee and by the Revenue but it has number set out the facts found by it from the evidence on the record in the light of the arguments advanced.
In, appeal the Appellate Assistant Commissioner agreed with the Income tax Officer.
Entries relating to interest were posted till the end of Samvat Year 2006 in the account on the amount due at the foot of the account.
2,68,385/ due from the Bombay firm at the foot of their running account as a bad debt written off as irrecoverable.
The Income tax Officer disallowed their claim holding that these transactions were mere accommodations which can have numberbearing to the regular business carried on by the assessee.
