1989 (1) TMI 153

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....ced on 29th Nov., 1965 a sum of Rs. 30,000 to one. T.S. Malik against second mortgage of tenanted property belonging to the said T. S. Malik which was situated at Mulund. The said borrower paid interest from time to time which interest income had been returned by the assessee in the relevant years. The said borrower expired in 1975. His widow and sons repaid a sum of Rs 13,500 m February, 1976 lea....

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....d mortgage. Consequently, the assessee decided to write off the balance principal amount together with the interest as irrevocable and bad debt. According to the assessee the period of limitation for recovery of mortgage debt under Limitation Act, 1963 was 12 years from the due date. In the present case, due date was 29th Nov., 1967. Consequently, the period of limitation expired on 29th Nov., 197....

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.... before the AAC. The AAC found that there was in fact not outstanding. He also observed that since the assessee was not doing any money lending business the amount in question cannot be allowed as deduction either as bad debt or as capital loss. He, accordingly, confirmed the rejection of the claim. The assessee is now in further appeal before us and ground No. 1 relates to this item of Rs. 16,500....

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....stituted by new rights as a result of novatio of contract and the finding was that there was a casual connection existed between the extinguishment of rights in capital assets and the amounts received and that the said extinguishment was supported by consideration in this fielding, the loss was held allowable as capital loss. The facts of our case are entirely different and the principle laid down....