TaxTMI 
TaxTMI 
1947 (12) TMI 8
X X X X Extracts X X X X
X X X X Extracts X X X X
....llock, J. This is a reference under Section 66(1) of the Income- tax Act. The assessee deals in gold, silver, grain, and cotton etc., and as a result apparently of forward contracts entered into through Messrs. Gangaram Asaram of Bombay he became heavily indebted to that firm. The debt due to Gangaram Asaram was shown in the assessee's accounts, and interest on the debt was credited to Gang....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... receipt of the year of account." The Income-tax authorities have held that this item of Rs. 54,225 is a revenue receipt and not a capital receipt. The Income-tax Appellate Tribunal remarked:― "The fact therefore remains that a certain remission was granted by the creditor in the account which included revenue items which have been previously claimed by the assessee in his tradin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iminish their revenue or anything of that kind, in the words of Rowlatt, J., in British Mexican Petroleum Company, Ltd. v. Commissioners of Inland Revenue [1932] 16 Tax Cas. 570, at p. 583, and it appears to us that these two cases are very similar. The British Mexican Petroleum Company Limited became heavily indebted to other firms, and a large part of the debt was written off. That debt had been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has been finally dealt with in the preceding account, can form a trading receipt in the account for the year in which it is granted." So also Lord Macmillan at page 593:― "I cannot see how the extent to which a debt is forgiven can become a credit item in the trading account for the period within which the concession is made." The case on which the Income-tax Appellate Tribuna....