TaxTMI 
TaxTMI 
1935 (1) TMI 28
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....ebtors shown in the assessees' accounts as received and taxed in the assessment." 2. Now, in Mian Feroz Shah v. Commissioner of Income-tax, Punjab 1 Lord Blanesburgh, delivering the judgment of the Judicial Committee, observed : "Too much emphasis has, they think, throughout the case been attached to the uses by the Income-tax Officer and the Assistant Commissioner of the term "mercantile system". The finding of both, in its essential substance, was that the appellant's system of accounting, by whatever name called, required the inclusion in his accounts of 1926-27 of the ₹ 90,618 referred to, and the only question open to judicial determination is whether there was any evidence before these officers upon ....
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....s, and shown in their accounts as received. This practice was according to the provisions of section order as understood by this Department. Accordingly when the Income-tax Officer came to make the assessees' assessment for 1933-34, and found that they had omitted to include in their return ₹ 23,373, which represented interest for which fresh pro-notes had been taken from non-Chettyar debtors and which was shown in their accounts as received, he included the amount in the assessment. His order was upheld on appeal." 4. The Income-tax Officer in his assessment order stated : - "In the present case, however, the assessee, according to the custom of the Chettyar community to which he belongs, has always been treating i....
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....ory notes from their debtors as security. 6. Now, it is well settled that a debt may be repaid in kind as weir as in bullion. Gresham Life Assurance Society v. Bishop 2, Raja Raghunandan Prasad Singh v. Commissioner of Income-tax, Bihar and Orissa 3, and Commissioner of Income-tax, Bihar and Orissa v. Maharajadhiraj of Darbhanga 4. 7. In Gresham Life Assurance Society v. Bishop- Lord Lindley observed : "My Lords, I agree with the Court of Appeal that a sum of money may be received in more ways than one, e.g., by the transfer of a coin or a negotiable instrument or other document which represents and produces coin, and is treated as such by business men. Even a settlement in account may be equivalent to a receipt of a sum of money, al....
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....es have elected to treat the interest due under the original loans as having been received and paid on the execution and delivery of the fresh promissory notes by the debtors, and the interest is entered as having been received both in the interest account and in the personal accounts of the respective debtors; the creditors accepting the obligations of the debtors under the fresh promissory notes in substitution for the old debts and the interest due thereon, and in past years being content that the interest accruing in this manner should be assessed to income-tax. In these circumstances I am unable to hold that there were no materials before the Income-tax Officer which would justify him in concluding that these sums, amounting in all to ....