9911796707
TMI Blog1982 (5) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... firm of M/s K. Nagaraj, B. Satyanarayana, Adoni. Even here the claim is further restricted to the sum of Rs. 22,193 only. The business of the aforesaid firm was closed in the year 1959-60. There was a suit filed against the firm for the settlement of the accounts. The Civil Court dismissed the suit on 13th March, 1978 relevant to the assessment year under appeal viz. 1979-80 (for which the year ended on 31st Oct., 1978). From the account copy filed before me by the assessee relating to the assessment year under appeal, i.e., 1979-80, it is seen that the sum of Rs. 23,752.89 written off during the relevant accounting year under appeal comprised inter alia of the following 4 items. For the asst. yr. 1958-59 (Y.E. 23rd Oct., 1957): Rs. 1,709. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed of partnership of the above firm should be looked into for the purpose of finding out whether the assessee was obliged to contribute capital and whether the sum in question represented capital of money-lending. He further referred to the following rulings in support of his stand: (1974) 97 ITR 265 (AP), (1969) 72 ITR 833 and (1971) 79 ITR 561 (All). 5. I requested the ld. Counsel for the assessee to produce a copy of the deed of partnership and the ld. Counsel has produced a copy of the deed of partnership dt. 24th Oct., 1957 of the firm of M/s K. Nagaraj, B. Satyanarayana, Adoni. In this partnership, besides the assessee, K. Nagaraja, there were three others viz, B. Satyanarayana, K. Eranna and B. Thimaiah. I find that the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Kasamsetty Radhakrishnaiah Chetty vs. CIT, A.P. (1967) 64 ITR 522 (AP). In that case, the IT Appellate Tribunal had taken the view that when a partner advanced monies to a firm of which he was a partner, it could not be called money-lending business. The Hon'ble A.P. High Court specifically negatived this contention by observing as under: "The Tribunal gave some other reasons for disallowing this sum as bad debt, but there is no doubt that it was influenced in its conclusion by the view that when a partner advances money to a firm of which he is a partner, it cannot be money-lending business. But we cannot accept this view. It is not only a matter of business practice but also perhaps in the interest of a partner to adva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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