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TMI Blog1943 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... e partners, the appeals were consolidated and a common order was passed in the firm's appeals in R.A.A. No. 184 (Bombay) of 1941-42. It will therefore be convenient to consolidate all the four applications in one reference, and dispose them of through a common statement of the case. 3. All the facts on which our judgment is based have been stated in detail by us in our order, dated 23rd June, 1942, in R.R.A. No. 184 (Bombay) of 1941-42. They may be summarised as below:- (i) Messrs. Vissonji Sons Co., took over the managing agency of the Acme Manufacturing Co., Ltd., in 1920. The appellant firm consists of three partners who are also partners in the managing agency firm. These partners also hold major portion of the shares in the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency firm was the same as the profit-sharing ratio as between the partners of the appellant firm. (xi) The new shares issued by the company were taken up by the partners of the managing agency firm in the same proportion as their profit-sharing ratio. (xii) The net effect of foregoing the sum of ₹ 7,20,000 ultimately resulted in an increase of the value of their shares. (xiii) The appellants got exclusive right for the purchase of B class shares of the company which had certain valuable rights attached to them. 4. Relying upon these facts we held that the amount of ₹ 7,20,000 given up by the appellants in the scheme of reconstruction of the company was not money advanced by them in the ordinary course of their money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the Income-tax Tribunal under Section 66(1) of the Income-tax Act. The question referred to the Court is: Whether in the circumstances of the case it was rightly held that the sum of ₹ 7,20,000 let off by the appellants in the scheme of reconstruction of the Acme Manufacturing Co., Ltd., was not money advanced in the ordinary course of their money- lending business; and that, therefore, it could not be claimed as bad debt under Section 10(2)(xi) of the Income-tax Act? It will be noticed that the question is limited in its character. It is only whether the Tribunal were right in finding that this ₹ 7,20,000 was not advanced in the ordinary course of the appellant's money- lending business. If we hold that the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one firm in law. I think there is a certain amount of confusion, if I may say so, in the case arising from the failure to appreciate that at the material dates, there was in law only one firm. There is a finding of fact that the company owed the managing agents a large amount of money, and that the sum of ₹ 7,20,000 was voluntarily given up by them in the scheme of reconstruction of the Acme Manufacturing Co., Ltd. Well, that seems to be a finding that this loan was really owned by the firm in respect of its managing agency business, and not in respect of its money-lending business, and that is really vital. It is then found that on this loan no interest was charged and that no other advance was made by the assessees in the ordinary c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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