1970 (2) TMI 36

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....ection 66(1) of the Indian Income-tax Act, 1922, is : " Whether, on the facts and in the circumstances of the case, the amount of Rs. 12,841 is a proper deduction as bad debt or loss incidental to the business of the assessee ? " The facts of the case, shortly stated, are as follows : The respondent carried on business as a commission agent and he was treated as agent of two non-resident ....

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....xi) of the Act. The Income-tax Officer rejected that claim on the ground that the loss had not arisen from business, profession or vocation or from carrying on of any business of money-lending or loans. The Appellate Assistant Commissioner rejected the respondent's appeal, but the Income-tax Appellate Tribunal, by its order dated October 5, 1956, held that the assessee's attempt to recover the deb....

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....wered in his favour. Mr. Joshi is right in his submission that, on the facts in the case, the decision of the Supreme Court in the case of Commissioner of Income-tax v. Abdullabhai Abdulkadar is applicable. In that case, the assessee-firm carried on business as commission agent and exported goods from India to a non-resident principal. The income-tax authorities had treated the assessee as the ....

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....cause of the business of another person and it was, therefore, not a permissible deduction under section 10(1) of the Act. The Supreme Court further held that under clause (xi) of section 10(2) a debt was only allowable when it was a debt and arose out of and as an incident to the trade. The debt had not arisen as a result of the trade and was not allowable under section 10(2)(xi) as a bad debt. I....