TaxTMI 
TaxTMI 
1990 (10) TMI 1
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....eceived certain amounts and they Were assessed under section 41(4) of the Income-tax Act, 1961 (herein after referred to as the "1961 Act"). The contention of the assessee was that he was not assessable under section 41(4) of the 1961 Act because these amounts had been written off as bad debts in the year 1959-60 and his claim for deduction, though initially disallowed by the Income-tax Officer, was subsequently allowed by the Income-tax Appellate Tribunal in I. T. A. Nos. 673-676 (Ahd.) dated July 12, 1963. The business of the assessee was discontinued prior to the previous year in which any part of the amount was received and, consequently, it was contended that these amounts, when received, were not assessable to income-tax under section....
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....anking or money-lending business, such sum in respect of loans made in the ordinary course of such business as the Income-tax Officer may estimate to be irrecoverable but not exceeding the amount actually written off as irrecoverable in the books of the assessee : Provided that if the amount ultimately recovered on any such debt or loan is greater than the difference between the whole debt or loan and the amount so allowed, the excess shall be deemed to be a profit of the year in which it is recovered and if less, the deficiency shall be deemed to be business expense of that year; ... " There is no dispute that the assessee's accounts were not kept on cash basis.. There is also no dispute that the assessee's business was discontinued ....
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....xistence in that year or not . ... " This sub-section refers to the deduction allowed in respect of a bad debt under the provisions of section 36(1)(vii) of the 1961 Act which reads as follows: "36. Other deductions.-(1). The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28. - . .. (vii) subject to the provisions of sub-section (2), the amount of any debt, or part thereof, which is established to have become a bad debt in the previous year: .... " Significantly, sub-section (4) of section 41 of the 1961 Act specifically states that tax is attracted whether or not the business or profession in respect of which the dedu....
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....on 10(2)(xi) in terms of which the amounts had been written off was deemed to have been made under the re-enacted provisions, as contained in section 36(1)(vii) and, consequently, the amounts recovered on any such debt were charge able under section 41(4). Section 24 of the General Clauses Act, 1897, in so far as it is material, reads : "24. Continuation of orders, etc., issued under enactments repealed and re-enacted.-Where any Central Act or Regulation is, after the commencement of this Act, repealed and re-enacted with or without modification, then unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, form or bye-law, made or issued under the repealed Act or Regulation, shall, so far as it i....