9911796707
TMI Blog1963 (8) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... een doing money-lending business on a large scale since long. Most of this business was being done through another firm called Messrs. Johrimal Sanhilal of Delhi. The assessee was sending money to Messrs. Johrimal Sanhilal and that firm advancing it to various debtors on behalf of the assessee. During the year 1936-37, Messrs. Johrimal Sanhilal suffered considerable financial set-back and in the beginning of 1937 the assessee made an application in the insolvency court for the adjudication of Messrs. Johrimal Sanhilal as insolvent. That application succeeded and in 1938 Messrs. Johrimal Sanhilal were adjudged insolvent. The main creditor was the assessee. These insolvency proceedings through an official receiver went on from 1938 till 1950 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question the Appellate Assistant Commissioner did not accept the view of the Income-tax Officer that the debt had become irrecoverable long before the accounting year as, in his opinion, neither the fact of insolvency in 1938-39 nor the payment of the first dividend could determine the question of irrecoverability. He relied, on the other hand, on a letter received from the official receiver in March, 1949, in reply to an enquiry by the assessee, the receiver stating that it was hardly possible to say whether any further sum would or would not be paid to the creditors of the insolvent till after the pending litigation was finally decided. On the basis of this communication the Appellate Assistant Commissioner held that even in March, 1949, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a dispute between the Punjab National Bank Limited and the official receiver, and that whichever way the dispute was settled the assessee could never hope to receive more than ₹ 2,500. The Tribunal was thus of the opinion that apart from this possible sum of ₹ 2,500 there was nothing else which the assessee could legitimately hope to recover from the insolvent after the year 1941 and from this concluded that the bulk of the debt had become irrecoverable soon after 1941 and, in any case, long before the relevant accounting year 1948-49. On these conclusions, the Income-tax Appellate Tribunal dismissed the assessee's appeal, while it allowed the Income-tax Officer's appeal in the sense that it accepted his view as ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en satisfied and no reference to this court would have been necessary. His grievance now is against the finding of the Appellate Tribunal that the debt in question had become irrecoverable long before the accounting year 1948-49 and although, as I have mentioned, Mr. Gupta admits that this is essentially a question of fact, his submission is that in law the finding of fact cannot stand unless there be some material on the record to support it and in the present case, according to learned counsel, there is none. To put it another way, Mr. Gupta is for the purpose of the present case satisfied with the view of the Appellate Assistant Commissioner that the disputed debt had not become irrecoverable during the relevant accounting period and had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay that a debt has become irrecoverable, there should at that point of time be no hope left for the recovery of that debt. In the present case the Tribunal has indeed observed that subsequent to 1941, "the assessee knew for a certainty that the maximum recovery that he could ever hope for would not exceed ₹ 2,500 apart from the first dividend which had already been received from the official receiver "and then said: "It is clear, therefore, that the assessee lost all hope of recovering the debt in question except to the extent of about ₹ 2,500 long before the relevant year of account." It is these observations which, according to Mr. Gupta, are unsupported by any material on the record, and the submission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case as there also the debtor had been adjudged insolvent and his estate was being wound up and the view taken was that during the actual process of the winding up it was hardly possible to say that a part of the debt had become irrecoverable. Very similar was the view expressed by a Division Bench of the Lahore High Court in a later case, Deoki Nandan and Sons v. Commissioner of Income-tax [1941] 9 I.T.R. 202, 209), where Dalip Singh J. said: "In the circumstances, it seems to me that the only date on which it can be said on the material on the record that the debt became finally a bad debt would be the 11th June, 1936, when the official receiver declared a final dividend and stated that no more was to be expected by the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
