1945 (2) TMI 27

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.... carried on a money-lending business in partnership with his brother at Penang under the Vilasam of A.Y. AR. At the end of 1939 the A.Y. AR. firm was dissolved and Muthukaruppan Chettiar started a new business at Penang under the vilasam of AR. M. M. He had four sons, who were joint with him, and the new business belonged to the family. While the A.Y. AR. firm was carrying on business it advanced ....

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....hukaruppan Chettiar as the manager of the AR. M. M. firm contended that in calculating the profits of the firm for 1940-41 it was entitled to deduct as a trade loss the sum of $ 2,500 being half of the sum of $5,000 which the A.Y. AR. firm had lent on the second mortgage. The Income Tax Officer rejected this contention, but he allowed a deduction of $ 30 made up of the $ 250 and expenses which the....

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.... the following questions: 1. Whether in the circumstances of the case, it was open to the Income Tax Officer to appeal to the Appellate Tribunal under Section 33(a) on the ground that no part of the bad debt was an admissible deduction under the Income Tax Act. 2. Whether in the circumstances of the case, the respondent firm is entitled in law to the allowance of the claim of 2,5....

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....ssee cannot be entitled to this deduction unless it represents a trading loss incurred during the year of account. It must be borne in mind that the assessee firm is an entirely different entity from the A.Y. AR. firm. In deciding what was the assessable income of the AR. M. M. firm during the year of account regard can only be had to what it started with and what was the position at the end of th....