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TMI Blog1953 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... i Deoniti Frasad Singh, who is the karta of the undivided family. The Income-tax Officer required the Essessee to furuish explanation as to the sources of these cash credits. The explanation given was that during the Samvat year 1997-1999 the assessee had withdrawn, cash from the business on several occasions and that he had also introduced cash business. In proof of this explanation the assessee furnished the personal account of Balmiki Frasad Singh for the Sarnvat years 1997 to 2000: Year Cashwithdrawn Cash Credits ₹ 1,03,500 ₹ 32,350 ₹ 90,000 Nil Nil ₹ 45,000 Nil ₹ 30,000 The Income-tax Officer refused to accept the ex planation of the assessee on the ground that there was material to suggest that the amounts with drawn by the assessee were converted into gold. and later on sold in the market when the price of gold had risen due to war conditions. The In come-tax Officer therefore held that the amount of ₹ 86,000 should be added to the income of the assessee and should be assessed to income-tax. There was another point taken by the assessee before the Income-tax Officer. This related to the amount of ₹ 14,518 which according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the source of the cash credit of ₹ 83,000. The relevant passage from the order of the Appellate Tribunal is as follows: The two sums of ₹ 40,000 ₹ 46,000 referred to items (0) and (c) of the first contention above are found credited on 3-4-45 and 24-5-45 to the capital account of the proprietor. A statement has been filed by counsel setting out the transactions in the capital account from 24-3-40 to 17-3-46 according to which it is found that ₹ 1,90,000 has been withdrawn from the business as against the total introduction (including this amount of ₹ 86,000) of ₹ 1,95,250. According to counsel, as part of the business routine, the business Manager is entrusted only with cash normally required by him for purposes of the day-to-day transactions; while the remaining cash balance of the day will either be withdrawn through Amanat Khata and kept under the custody of the more reliable hands of the business separately or, if the amount is very considerable, will be withdrawn by the proprietor himself for safe keeping. It is under these circumstances that the withdrawal of ₹ 1,90,000 in the above statement it is argued, has been made. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Income-tax Officer held that this amount of ₹ 83,000 should be taken as profit of the assessee from business in gold and silver. This finding was accepted by the Appellate Assistant Commissioner. But when the matter came up in further appeal the Appellate Tribunal held that there was no material to suggest that the assessee had carried on any trade in gold and Silver. Mr. Dutt also raised another important point. Counsel laid stress on the fact that the Appellate Tribunal accepted the account of home chest produced by the assessee as genuine account. This statement of the account of home chest for the year 1997 to 2000 Samvat has been reproduced in an earlier part of this judgment. The argument on behalf of the assessee is that the Appellate Tribunal has committed an arithmetical mistake which has materially prejudiced the finding of the Tribunal on this important question. On this point the Tribunal states that It is clear from the assessee's own statement of figures filed that he has introduced ₹ 1,95,250 as against ₹ 1,90,000 only withdrawn during the period so that it is evident that these withdrawals are not always kept intact for subsequent int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the question on this point must be answered in favour of the assessee. ( 6) The second question relates to the amount of ₹ 14,518 which' was claimed by the assessee as a bad debt within the meanmg of Section 10(2) (xi), income-tax Act. The contention of the assessee on this point is that the decree was passed on 16-9-1932 and it became time-barred only on 16-9-1945 which date fell, within the accounting year 1945-46. it was argued that the Income-tax authorities ought to have held that this item was a bad debt .and that the assessee was entitled to an allowance on this account under S- 10(2)(xi), Income-tax Act. In this connection Mr. Gopal Prasad drew our attention to the facts that in the execution, of the mortgage decree the debtor's properties had been sold about four years previous to the accounting year. Mr. Gopal Prassd said that the Income-tax Officer as well as the Appellate Assist- Commr. proceeded upon the view that the decree for ₹ 14,518 became irrecoverable on the date when the debtor's properties were sold in execution of the mortgage decree. But the difficulty in accepting the argument is that this ground is not taken by the Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt is bad and irrecoverable within the meaning of Section 10(2)(xi), Income-tax Act. But it is not a decisive circumstance and as pointed out by the Judicial Committee in -- 'Income-tax Commr. C. P. and Berar v. Section M Chitna-vis', AIR 1932 PC 178 (B), a statute-barred debt is not necessarily bad, neither is a debt which is not statute-barred necessarily good, but the age of a debt is a relevant matter to be taken into consideration with the other circumstances. In the present case, there is the additional factor that there is no material to indicate that the debtor Harihar Prasad Singh had no other source of income or had acquired no other properties after the mortgage execution case in which the mortgaged properties were sold. The fact that in the last execution case filed on 7-9-1944 the assessee made a prayer for arrest of the judgment-debtor shows that there was some hope or ray of hope for realising the amount of the decree by the process of arrest and that the judgment-debtor had other sources of income with which he might have discharged the decretal debt. In a matter of this description, it is a relevant consideration that the assessee in prosecuting the execu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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