9911796707
TMI Blog1946 (4) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... who was the assessee, carried on money-lending and other businesses. The assessment year with which this reference is concerned is 1941-42 and the year of account is from Diwali Sambat, 1996, to Diwali Sambat, 1997, corresponding to November, 1939, to October, 1940. It appears that a sum of ₹ 1,73,197 was, at one time, due to the assessee from Messrs. Hargobind Rai Madanlal of Calcutta. In the course of the assessment, the assessee claimed a deduction of this sum from the receipts upon the ground that it is represented a bad debt in accordance with the provisions of Section 10, sub-section (2), clause (xi), of the Indian Income Tax Act. The Income Tax officer disallowed the claim of the assessee upon the ground that the debt in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written off by the assessee. It was further contended that so long as the limitations for recovery of the debt in question had not run out, it could not be said that the debt had become legally irrecoverable - the sense in which, according to learned counsel, the word bad has been used in clause (xi) to sub-section (2) of Section 10. We cannot accede to either of these contentions. Before clause (xi) was introduced in the Indian Income Tax Act, bad debts were always treated as a permissible deduction in computing the assessable income. Both these contentions were raised in the case of Commissioner of Income Tax, Central Provinces and Berar v. Sir S. M. Chitnavis. While repelling these contentions, their Lordships of the Privy Council cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became bad. The question of the state of mind of an assessee is one of fact and has to be determined upon the evidence before the Income Tax authorities and the Income Tax Tribunal. The finding arrived at by the Income Tax Tribunal upon this matter is not open to challenge unless it is clear that that finding has been arrived at through error of law. In other words, no question of law can be said to arise out of the order of the Income Tax Tribunal, unless some principle of law has been violated by that Tribunal in arriving at the finding. We are not satisfied that the Tribunal has ignored or violated any principle of law in arriving at the finding at which it was arrived. We have no doubt that that finding is based upon admissible and rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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