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TMI Blog1992 (4) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... reweries Pvt. Ltd. as being a business loan granted by the company which has already become bad in view of the debtor become defunct. " 3. The assessee in this case is a Private Limited Company rendering consultancy services in the branch of Marine Engineering to various authorities including Govt. undertakings. The Assessing Officer, in the course of the assessment proceedings, came across a claim for bad debts on account of a sum of Rs. 2,50,000 advanced to M/s. E.M.S.U. Breweries. It was explained to the Assessing Officer that the amount had been written off as being irrecoverable, as there was no chance of recovery. A reference was also made to the fact that a decree obtained from the Hon'ble Delhi High court against the debtor could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 could not be entertained. 6. The learned counsel for the appellant reiterated more or less the same arguments as had been advanced before the authorities below. According to him, even if money-lending activity was not a part of the normal business activity of the assessee, the fact that it had given a loan to M/s. EMSU Breweries on interest by itself brought into existence a money-lending transaction. The submission, thereafter, was that the amount in question being in the nature of a business advance and having not been recovered at all till date, the claim for deduction was required to be considered favourably. A further reference was made to the fact that the decree could not be executed and the time-limit for its execution had elaps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee to establish that the loan transaction was in the course of its business and one had also to see, whether the interest in the earlier years had been taxed under the head " business " or " income from other sources ". The further submission which was made was that the provisions of section 155(6) were not applicable, inasmuch as the ITO had not recorded any satisfaction which was required to be done under the said sub-section. The aforesaid arguments were advanced by the Departmental Representative on the assumption that the amount in question did represent a bad debt. In support of his arguments, he placed reliance on the following decisions :---- (a) Nanak Chand Mamraj Mal v. CIT [1964] 52 ITR 410 (Punj.). (b) CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid limb as no material is available on the record to show that it was engaged in 'money-lending' activities. Money lending, according to us, encompasses a wide range of activities which are carried on in a systematic manner and the ultimate motive being to keep in tact the principal amount, and earn income in the form of interest. The transaction with which we are concerned, can by no stretch of imagination, fall within such an activity, inasmuch as it appears to be a solitary transaction to which are unattached the methods/customs, which are germane to the business of money-lending. In the final analysis, we opine that since the assessee's case does not come within the language of section 36(2)(i)(a), the claim cannot be allowed. The orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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