TaxTMI 
TaxTMI 
1936 (1) TMI 23
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.... The following two questions were referred to this Court under Section 66(2) of the Indian Income Tax Act on behalf of the firm Harnand Rai Harbhagat Rai, Multan, by the Commissioner of Income Tax, Punjab, North West Frontier and Delhi Provinces, Lahore:- (1) Whether there was proper and material evidence before the Income Tax authorities to disallow Rs. 27,768 claimed as a bad debt in the acco....
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....me before the Commissioner. Large sums were undoubtedly borrowed by Haji Sikandar Khan from the assessee firm. The final adjustment between them took place on the 10th of July 1928 when a sum of Rs. 24,388 was found due by Haji Sikandar Khan. The parties came to an agreement about this to the effect that this sum would be repaid to the assessee firm by Haji Sikandar Khan on receipt of cheques f....
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....n that this received corroboration from the language of the final agreement which I have already given. He therefore came to the conclusion that this loss was a loss of capital belonging to the assessee firm which had been invested by it in Haji Sikandar Khan's business. He was also of opinion that the loss was not allowable under Section 10(2)(ix) as it was not a loss pertaining to the money ....
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....h that this was not a loss pertaining to the money-lending business but was a loss of capital invested in Haji Sikandar Khan's business. Further it cannot be said to have become a bad debt in 1928. Haji Sikandar Khan absconded, it is true, in that year but the assessee firm had three years to make up their minds as to whether it was worth while suing him. It was not therefore till the 10th ....