1979 (7) TMI 6

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....assessment for 1962-63 ?" The respondent-assessee is a registered firm carrying on business in money-lending and commission agency in groundnut seeds, castor seeds etc. In the course of its business, the assessee entered, on behalf of its constituents, viz., Tiruveedhi Lakshmaiah, Tiruveedhi Narayanasetty and Kotrika Venkatasetty and Sons, into forward contracts in groundnut and castor seeds in the Bombay market. The settlement of the aforesaid contracts resulted in losses payable by the said parties. In fact, the assessee paid the losses on their behalf and debited their accounts with the same, amounting to Rs. 11,466, Rs. 70,561 and Rs. 62,302, respectively, The aforesaid three parties did not pay the amounts already paid by the assess....

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....assessee on its own. The assessee had earned commission on account of those transactions which was assessed to income-tax from its commission business and the assessee has suffered the loss on account of non-realisation of advances made on behalf of its constituents and, therefore, it was intimately connected with its commission business and not one arising from speculative business. The assessee carried on only one business consisting of two activities, viz., money-lending and commission business and they were inseparable from each other and there was intermingling and interlacing of funds and, therefore, the closure of the commission business in the year of account did not result in the stoppage of the assessee's business activity to whic....

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....mission agents and the normal trade practice of commission agents was to pay off losses on behalf of their constituents and to recover the same from the latter in due course and such payments of accommodation were necessary both in the assessee's interest and in the interests of its constituents. The aforesaid findings are really findings of fact. There is ample material in support of the same and the said findings would justify the view of the Tribunal that the assessee is entitled to deduct the amount in question from its income. We, therefore, hold that the contention of the Revenue that the loss relates to speculative business of the assessee is not correct. This brings us to examine the question whether the assessee is entitled to have....