9911796707
TMI Blog1976 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... d, has under section 256(1) of the Income-tax Act, 1961, referred the following question for our opinion : " Whether, on the facts and in the circumstances of the case, the claim for deduction of Rs. 3,00,114 was admissible under section 36(1)(vii)/ 36(2)(ii)/41(4) of the Income-tax Act, 1961, in the present assessment ? " The assessee was the sole selling agent of Messrs. Elgin Mills Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, and as such it could not be said that the money had been advanced during the course of business. That decision was upheld for the assessment year 1958-59 by the Tribunal as well. In the present assessment, the Income-tax Officer took the same view and did not accept the assessee's claim. An appeal filed by the Appellate Assistant Commissioner failed. The assessee thereafter filed a secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso urged that under articles 12 and 16 of the memorandum of association of the assessee-company, it was permitted to do money-lending business, and this advance could be treated as having been made for money-lending purposes. It was pointed out that in the year 1962-63, the assessee received an income of Rs. 1,41,863 which was taxed and it also paid interest at Rs. 2,58,083 which was debited in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable. It found that, in these circumstances, it could not be said that the debt had become bad during the year of account, specially so in view of the fact that the debt was written off only after nine months. It also found that the mere fact the debtor-company had gone into liquidation was not itself proof of the fact that the debtor-company did not have any assets to pay the amount, and neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or on considerations of business expediency, not having been challenged by any appropriate question to this effect, an answer in favour of the assessee cannot be entered in this reference. Further, the Tribunal has found as a fact that the debt in question had not become bad or irrecoverable in the year of account. This completely demolishes the petitioner's claim to claim this amount as bad debt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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