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TMI Blog1970 (2) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... K. K. DESAI. JUDGMENT The judgment of the court was delivered by K. K. DESAI J.-The question of law in this reference under section 66(1) of the Indian Income-tax Act, 1922, is : " Whether, on the facts and in the circumstances of the case, the amount of Rs. 12,841 is a proper deduction as bad debt or loss incidental to the business of the assessee ? " The facts of the case, shortly sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts as bad debts and claimed allowance in respect of these amounts on the ground of business loss under sections 10(1) and 10(2)(xi) of the Act. The Income-tax Officer rejected that claim on the ground that the loss had not arisen from business, profession or vocation or from carrying on of any business of money-lending or loans. The Appellate Assistant Commissioner rejected the respondent's appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere non-residents. He, therefore, contends that the above sum was business loss and the question in this reference should be answered in his favour. Mr. Joshi is right in his submission that, on the facts in the case, the decision of the Supreme Court in the case of Commissioner of Income-tax v. Abdullabhai Abdulkadar is applicable. In that case, the assessee-firm carried on business as commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be and became the liability of the assessee. The loss which the assessee had incurred was not in its own business but arose because of the business of another person and it was, therefore, not a permissible deduction under section 10(1) of the Act. The Supreme Court further held that under clause (xi) of section 10(2) a debt was only allowable when it was a debt and arose out of and as an inciden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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