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TMI Blog1980 (7) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... be made under section 10(2A) of the Indian Income-tax Act, 1922 ? The assessee owns a rice mill and in the year 1946 he had mortgaged his immovable property including the mill machinery in favour of M/s. Tripura Modern Bank Ltd. with a view to obtain financial assistance from the bank. From time to time that bank financed the assessee. Some time after, the bank was closed down and an official liquidator was appointed. The High Court of Calcutta made an order against the assessee on September 3, 1957, for the payment of a sum of ₹ 3,76,914-11-3 along with further interest @ 6% per annum till the date of realisation and costs on the basis of the dues outstanding from the assessee to the said bank. This amount included a sum of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30,300 as interest, allowed in the years 1946-47 to 1949-50, and, therefore, he reduced the addition by that amount and sustained the addition of the balance amount. The assessee went up in further appeal before the Income-tax Appellate Tribunal, Calcutta Bench, against the addition of the amount as sustained by the AAC, and on consideration of the materials on record, the Tribunal came to the conclusion that the addition of the balance amount to the profit during the assessment year was not tenable in law. Let us note s. 10(2A) of the Indian I. T. Act, 1922, which reads as follows : (2A) Where for the purpose of computing profits or gains under this section, an allowance or deduction has been made in the assessment for any year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing ₹ 71,949 towards the annual bonus payable to its employees. The ITO, however, made an assessment to the best of his judgment under s. 23(4) of the Indian I. T. Act, 1922, estimating the appellant's income at ₹ 1,30,000 having as a guide the earlier year's assessment, in which year also there was a bonus claim. In the accounting year relevant to the assessment year 1957-58, a sum of ₹ 17,470 was paid to the employees as bonus in full settlement and the balance of ₹ 54,479 was credited to the profit and loss account. The question was whether the sum of ₹ 54,479 could be assessed as deemed profit, under s. 10(2A) of the Act, for the assessment year 1957-58. The Tribunal held that there was nothing on r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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