TMI Blog1945 (3) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the amount in dispute was not a trade debt at all, but represented business expenditure incurred in a year preceding the year of account. An appeal was preferred to the Appellate Assistant Commissioner which was unsuccessful. The Appellate Assistant Commissioner agreed with the Income-tax Officer that the amount in dispute represented business expenditure incurred in a year preceding the year of account and made a further point against the assessee to the effect that the claim did not relate to the business of the assessee company. Being dissatisfied with the Appellate Assistant Commissioner's finding, the assessee preferred an appeal to the Tribunal which was determined by the Tribunal's order in R. A. A. No. 119 (Bombay) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Board of Revenue in the matter ; but no relief was obtained. A representation was then made to the Governor-General in Council which resulted in a partial relief in respect of one of the two shipments ; but the claim in respect of the shipment received per S. S. Lincoln Elseworth stood rejected. Having exhausted all the aforementioned remedies, a suit was filed in the High Court of Judicature at Calcutta, praying for the setting aside of the assessment to customs duty and claiming refund of a sum of ₹ 1,33,101-13-9. 4. We may mention here that by the time the representation to the Governor-General in Council was made the assessee company had acquired the business of the National Petroleum Company and the claim of Ishardas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration for the claim of the business against the Secretary of State and in fact a major portion of the claim which the company purchased according to Clause 4 of the above-mentioned agreement was recovered by the company in pursuance of the relief granted by the order dated February 8, 1935, of the GovernorGeneral in Council. The Tribunal concluded that Ishardas Ramchand was to a large extent justified in March 1934 in treating what he considered to be an excess payment as an item recoverable from the Secretary of State. The amount paid in excess of the sum which was payable according to Ishardas Ramchand was considered by him as a part of the circulating capital of the business. The Tribunal however was of the view that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtly are that the appellant company was floated mainly with the object of acquiring the petroleum business of Ishardas Ramchand of Bombay. Ishardas had imported from Rumania petrol in two ships and they arrived at Calcutta. The Port Trust authorities demanded duty at a certain rate. Ishardas' contention was that he was liable to pay duty at a lower rate, but he ultimately paid to the Port Trust authorities duty at the rate claimed under protest. He then made various representations to the Governor-General in Council and in respect of one of the shipments he obtained certain reliefs ; but with regard to the other shipment, the Governor-General in Council refused to grant any relief. The business of Ishardas was taken over by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and loss account. We are not really concerned with the method according to which the assessee keeps his books of account or what view he took of this particular payment. It may be that the assessee took an optimistic view of the situation and expected to succeed either in his representation made to the Governor-General in Council or in his litigation in the Calcutta High Court ; but the ultimate decision leaves no doubt that what was paid in 1934 was a proper payment of duty and it was properly debitable to the profit and loss account as an expense in 1934. It cannot be called a debt which became a bad debt in 1941. Therefore we must answer the question in the negative. The assessee must pay the costs of the reference. Reference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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