TMI Blog1954 (3) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... actions in S. Y. 1996, but interest was charged and a sum of ₹ 17,826-5-9 was carried forward to S. Y. 1997, In S. Y. 1997, a sum of ₹ 2,927-6-3 was credited to the account of the debtor, the narration being ; Havala in respect of the balance of the amount of the sale price of your bungalow which was mortgaged to Doongershi goculdas after paying up the mortgage amount. 3. Jeevanlal Vallabhdas had mortgaged a property of his to one Seth Doongershi Goculdas of Adoni. the assessee took over from Doongershi Goculdas the mortgage by paying the amount due to Doongershi Goculdas. An account was opened by the assessee in his books account in the name of Seth Doongershi goculdas of Adoni and a sum of ₹ 5,684-10-3 was debited in this account. the property was sold to one Chowdhry Mohmeddin Sahbe for a sum of ₹ 10,300 in S. Y. 1996. The amount realised on the sale of the property belonging to Jivanlal Vallabhdas was credited to the account of Doonershi Goculdas. This account showed a credit balance of ₹ 2,952 at the close of S. Y. 1996. The credit was due to excess realised on the sale of the property belonging to Jivanlal Vallabhdas over the amount for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement of the case been finalised after hearing the parties. The assessee desired that the statements of accounts should be made annexures. We think it is not necessary. No suggestions are mad by the Departmental Representative. N. A. Palkhivala with A. P. Patwar, for the assessee. G. N. Joshi, for the Commissioner. JUDGMENT CHAGLA, C.J. The assessee is the heir and legal representative of one Chimanlal Lallubhai Shah. One Jivanlal and dealings with this Chimanlal and he became the debtor of Chimanlal. The transactions between Jivanlal and Chimanlal continued up to S. Y. 1994 and thereafter there were no further transactions. In S. Y. 1995 and 1996 the debit balance was carried forward and interest was added to it. In S. Y. 1993 Chimanlal obtained a transfer of mortgage from one Doongershi Goculdas to whom Jivanlal and mortgaged his property and he maintained in his books of account an account in respect of this mortgage. In S. Y. 1996 the mortgaged property was sold and a balance of ₹ 2,952 was found in favour of the mortgagor. A sum of ₹ 25 being tax paid in respect of this property was debited to this account and the balance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the taxing department having in one assessment held that a debt was good, it could not in another assessment contend that the debt was bad. Now, it is well-settled that the doctrine of estoppel does not apply in cases of successive assessments. An assessment is complete in itself and the taxing department is not bound by any contention it took up in one assessment when the question arises with regard to a different assessment, and even assuming that the representation made by the department was that the debt was good when it assessed the assessee to tax on that debt in respect of interest, even so it would be open to the department to take up a contrary and inconsistent attitude in a different assessment. But again, with respect, what we do not understand is how the Patna High Court took the view that the department had taken up an inconsistent attitude. When the assessee paid tax on interest on the debt no question arose and no question could possibly arise as to whether the debt was a bad debt or not. It was only when in the subsequent assessment the assessee claimed the debt to be a bad debt and wanted to deduct it from his income that the department was called upon on consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very little bearing on the question as to whether a particular debt has become a bad debt or not. In that very judgment, again, on the same page, we said : In my opinion it cannot be left to the volition of the assessee to decide by his own conduct as to when the debt becomes a bad debt. His making entries in his books of account is an exercise of his own volition. It is not left to his option to fix the date as to when the debt becomes a bad debt. And in laying down this principle we were following a very early decision of the Privy Council in Sir S. M. Chitnavis v. Commissioner of Income-tax, C. P. Berar ((1932) L. R. 59 I. A. 290 ; 6 I. T. C. 453), where the Privy Council laid down that whether a debt is a bad debt and and when it became bad are questions of fact to be determined in case of dispute not by the assessee or by the exercise of any option on his part of declaring it bad but by the appropriate Tribunal upon a consideration of all relevant and admissible evidence. Therefore, what we have to consider is whether there is any evidence to justify the finding of fact given by the Tribunal. In this case the Tribunal has agreed with the finding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjected to tax. There are two other circumstances which according to Mr. Palkhivala the Tribunal has not taken into consideration. One is that the debt became barred by limitation in S. Y. 1997 and according to Mr. Palkhivala that was an important circumstance which led the debtor to write it off in S. Y. 1997. Now, the Privy Council in the case to which we have referred has emphasised that the mere fact that a debt was incurred at a date beyond the period of limitation will not by itself make the debt a bad debt. Still less will it fix the date on which it becomes a bad debt. A statute barred debt is not necessarily bad, neither is a debt which is not statutorily barred necessarily good. Therefore the mere fact that a debt had not become time barred is not a conclusive circumstance in favour of holding that it had not become bad within the period of limitation. The other circumstance on which Mr. Palkhivala has relied is that tax in respect of the mortgaged property in the sum of ₹ 25 was paid in S. Y. 1997 and according to Mr. Palkhivala it is only after this amount was paid that the debt due was ascertained and it was only after the debt was finally ascertained that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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