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1951 (10) TMI 2 - SUPREME COURTWhether, on the facts and in the circumstances under which the sum of ₹ 8,197 was dealt with by the respondent, it is a permissible deduction from his income under section 10(2)(xi) of the Income-tax Act in the assessment year? Held that:- The facts are that when a division was made between the partners on the 12th September 1942, the books of the partnership were closed, an account of the debtor was opened in the family books and be was debited with the amount of ₹ 8,197, indicating that he became a debtor of the new partnership of the business and the debt became a loan advanced by the assessee's money-lending business to the debtor. When later on there were payments, the debtor received credit for such payments in this account with the respondent and must have got a discharge receipt from him. He was thus recognised as a debtor of the new firm and the amount in question being a loan of the money-lending business of the respondent, it was an admissible deduction under section 10(2)(xi) of the Act. Appeal dismissed.
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