TMI Blog1962 (9) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ibited under the Spices Forward Contract Prohibition Order, 1944. Out of the constituents of the assessee, who had suffered losses in these transactions, some paid their losses, while the others did not. When the assessee attempted to recover the losses from them, they refused to pay on the ground that the transactions, being in essential commodities, were forbidden by law and the assessee, therefore, had no enforceable claim against them. Although the losses suffered by the constituents were not paid by them to the assessee, the assessee had to pay to the association the amount of the said losses because its work as adatias in forward business involved an indemnity to the association on behalf of the constituents that if the losses were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he computation of profits under section 10(1) Mr. Joshi, learned counsel for the revenue, has argued that in the first place the Tribunal was not entitled to hold that the assessee's claim could be allowed on general principles governing the computation of profits under section 10(1). According to him the assessee had never claimed the deduction under section 10(1), his claim being only as for bad debts falling under section 10(2)(xi). The claim of the assessee, therefore, on the case made out by him was either allowable under section 10(2)(xi) or it was not. If it could not be allowed under section 10(2)(xi), no new case could be made out for the assessee allowing the same under section 10(1). According to him, therefore, so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the claim belongs if all the facts necessary for treating the claim under that head have been already stated by the assessee and no further investigation into any fresh facts is found to be necessary to give the assessee the said relief. In the present case, the facts which the assessee put before the Income-tax Officer and the Tribunal were that he had entered into these transactions on behalf of his constituents. The constituents had suffered losses and when the assessee approached them, they refused to pay the losses on the ground that the transactions were forbidden by the Prohibition Order. The assessee had, however, to pay the amounts to the association because the condition of its business as commission agents obliged it to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest its decision on any other ground provided before basing its decision on the said new ground, it gives the party affected sufficient opportunity to be heard on that ground. It is not disputed that such an opportunity was allowed to the other side before it had decided in favour of the assessee under section 10(1). On the merits of the said ground also in our opinion the decision of the Tribunal is correct and in the circumstances of the case the assessee was entitled to treat the deductions as a revenue loss in computing its profits of the business under section 10(1), inasmuch as for the purpose of doing its business as an adatiya the assessee had to make those payments to the association. As to the claim being allowable as bad debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present debt. The Tribunal, if it did not agree with the view taken by the Income-tax Officer that the claim did not qualify for a debt, should have seen further whether the requirements of section 10(2)(xi) were satisfied or not before holding that the claim fell under section 10(1). This the Tribunal has not done. In our opinion the only contention on the basis of which the appellants' claim was denied by the department was that the debt was unenforceable. That, at any rate, appears to be the sole contention urged before the Tribunal and if that contention were to fail, no further contention was sought to be raised by the department that even if it be regarded as a bad debt there were other grounds for rendering it incapable of bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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