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TMI Blog1945 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Vilasam of A.Y. AR. At the end of 1939 the A.Y. AR. firm was dissolved and Muthukaruppan Chettiar started a new business at Penang under the vilasam of AR. M. M. He had four sons, who were joint with him, and the new business belonged to the family. While the A.Y. AR. firm was carrying on business it advanced the sum of $ 5,000 to a customer of the firm on a second mortgage of Immovable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the profits of the firm for 1940-41 it was entitled to deduct as a trade loss the sum of $ 2,500 being half of the sum of $5,000 which the A.Y. AR. firm had lent on the second mortgage. The Income Tax Officer rejected this contention, but he allowed a deduction of $ 30 made up of the $ 250 and expenses which the firm had incurred in connection with the debt. The assessee appealed to the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pen to the Income Tax Officer to appeal to the Appellate Tribunal under Section 33(a) on the ground that no part of the bad debt was an admissible deduction under the Income Tax Act. 2. Whether in the circumstances of the case, the respondent firm is entitled in law to the allowance of the claim of 2,524 dollars as a deduction from its income from business. 4. We consider that the Tribunal e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year of account. It must be borne in mind that the assessee firm is an entirely different entity from the A.Y. AR. firm. In deciding what was the assessable income of the AR. M. M. firm during the year of account regard can only be had to what it started with and what was the position at the end of the period. One of its assets was a half share of this second mortgage. We are not concerned wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 8 ITR 408 (Cal) and In re the Commissioner of Income Tax, Burma v. P.L. S.M. Firm I.L.R.(1934) Rang. 483, which were quoted to us in the course of the argument. 6. The answer we give to the second question is that the assessee is not entitled to a deduction of the sum of $ 2,524. 7. As the reference has succeeded, the respondent must pay the costs, ₹ 250. - - TaxTMI - TMITax - I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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