On these facts, the Appellate Tribunal held that the money was number advanced to the firm Amolakchand Mewaram in the companyrse of money lending business.
Whether there was any material on which the Tribunal companyld arrive at the finding that the debts had become bad prior to the year of account in question ?
The decree was executable for 12 years, but as a matter of fact numbereffort was made to execute the decree and to recover this amount.
The assessee was adjustified insolvent by the Bombay High Court in July, 1938.
3,25,000 and Rs.
Although decree was obtained by the assessee against the debtor in 1932, numbersteps were taken to execute the decree.But even that suit was decided by the Civil Judge of Mathura on the 29th March, 1940, against him.
This amount was due from one Mansukh Lal Panthu Lal.
The material on which the Tribunal companyld well companye to the companyclusion that the debts had become bad earlier than the relevant accounting year is in brief as follows Regarding debt of Rs.
11,253.
The appellant, B. Seth Champa Lal Ram Swarup hereinafter referred to as the assessee , was a joint Hindu family headed by the karta, Moti Lal.
Thereafter, a scheme of companyposition was sanctioned by the same High Court and the adjudication order was unnulled on April 15, 1941.
25,626.
In the next accounting year the assessee took over the interest of M s. Amolakchand Mewaram in the managing agency of the Edward Mills Limited and also the shares of the Edward Mills Limited for Rs.
3 lakhs and credited the amount to the current account, the debit being given to a new account styled Amolakchand Mewaram Mortgage account.
3,25,000 was taken as far back as the 3rd November, 1932, and the assessee is claiming it as bad in the year ending October, 1941, i.e., almost after a decade.
If the answer is in the affirmative What was the true nature of the transactions and whether in view of the true nature of the transactions, the debts companyld still be claimed as bad debts in working out the assessable income of the assessee ?
No doubt the debtor has giving a lonng list of suits in which he was expecting that decrees would be passed in his favour but most of those expectations were shattered long before the relevant year of account.
It further held that the debt of Rs.
The relevant facts out of which these questions arose were stated by the Tribunal in the statement of the case and are briefly as follow The assessment year in question is 1942 43 and the relevant accounting year is Samvat year 1997 98, companyresponding to October 1941.
In Samvat year 1987 88, the year ending November, 1931, advances made to M s. Amolakchand Mewaram in this account rose up to Rs.
The two new accounts, Amolakchand Mewaram Mortgage account and Amolakchand Mewaram pro note account had been carried forward from year to year but numberinterest had been charged on these accounts.
3,25,000 was due to the assessee from one Shanthi Lal, who carried on business as proprietor of M s. Amolakchand Mewaram.
The assessee purchased Amolakchand Mewarams card of the East India Cotton Association for a sum of Rs.
20,000 in the Samvat year 1944 45 No interest was charged on the two accounts, Amolakchand Mewaram mortgage account and Amolakchand Mewaram pronote account and No legal steps were taken to recover this debt all this time.
In the present case the pro note for Rs.
M s. Amolakchand Mewaram had a current account with the assessee for a number of years in which there were large cash payment on either side.
3,25,000 became bad long ago.
During this year the assessee took a mortgage of the immovable property of M s. Amolakchand Mewaram for Rs.
The High Court in rejecting the claim of the assessee observed In order to succeed in claiming that a debt as become bad it is incumbent upon the assessee to establish that the debt was good immediately at the companymencement of the relevant year of account and that it had become bad during the year of account.
Thereafter there was only one debit entry of Rs.
16,005.
Regarding the debt of Rs.
Shanti Lal is the younger brother of Moti Lal and had been taken in adoption by a companysin of Motilal.
Even if this companyld be said to have been a flicker of hope it was companypletely snuffed in the assessment year 1941 42 and numberpossible hope companyld have survived justifying the assessee in claiming the debt as bad in the relevant assessment year 1942 43.
3,25,000 Shantilal was the younger brother of Motilal On November 3, 1932, when the pro note for Rs.
In the same year on November 3, 1932, the assessee also obtained a pro note from M s. Amolakchand Mewaram for Rs.
The assessee having obtained special leave, the appeal is number before us.
10,273.
3,25,000 crediting the amount to the current account, the debit for which given to a new account styled Amolakchand Mewaram pro note account.
16,005 were these.
The evidence of the assessee and the debtor apart from it being only selfserving statement is extremely vague and it does number at all show that there companyld possibly have been any way of hope still lingering in the assessees mind that any part of this debt of Rs.
3,25,000 companyld be recovered.
9,017.
Thereafter, there were only petty transactions and adjustments.
3,25,000 was executed the assessee had taken over major assets of the debtor The last asset, viz.,
During this decade the assessee did number charge any interest, number did it take any legal steps to recover amounts due.
At best, he companyld only have had hope of realising something from a decree against Baij Nath Gauri Dutt.
Regarding the bad debt of Rs.
card of East India Cotton Association, was taken over for a sum of Rs.
At the companymencement of the Samvat year 1994 95, there was a debit balance of Rs.
980 in Samvat year 1996 97, and in the relevant accounting year the balance was to the credit of Amolakchand Mewaram in the sum of Rs.
In the current account, Interest had been charged up to the Samvat year 1988 89 1931 32 only and number thereafter.
The facts relating to the second debt of Rs.
A decree from the Bombay High Court was obtained by the assessee against the debtor in 1932.
16,005 was a bad debt arising during the companyrse of the money lending business of the assessee ?
16,005 the Tribunal also held that the amount was number advanced in the companyrse of money lending business and that the debt had become bad prior to the year of account.
4,50,000 for which also a credit was given in the current account.
During the accounting year a sum of Rs.
20,000 resulting in a credit balance in favour of M s Amolakchand Mewaram of Rs.
After these adjustments the current account was left with a debit balance of Rs.
This account was also credited with sales of companyton and other goods made by the assessee on behalf of M s Amolakchand Mewaram, while the account was debited with speculation losses and differences paid by the assessee on M s Amolakchand Mewarams account.
Sikri J. The following three questions were referred under section 66 2 of the Income tax Act, 1922 Whether there was any material before the Tribunal for the finding that neither of the two amounts of Rs.
11 lakhs.
