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TMI Blog1972 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion: "Whether, on the facts and in the circumstances of the case, the loss of Rs. 1,93,750 was an allowable deduction under section 10 of the Income-tax Act?" Material facts are these: The assessee-respondent was a member of a Hindu undivided family which carried on money-lending business in India and abroad. In the course of such money-lending business, properties were taken over in settlement of debts as and when occasion arose. The family was disrupted on March 28, 1939. The assessee received some shares in some companies, properties and gardens and certain other items in Malaya. Even after the partition the assessee continued the money-lending business in Malaya. During the war, in general with others, the assessee suffered dama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y would have considered those profits as assessable income. It is strange that when loss had occurred in such a situation the department should contend that the loss in question was not a business loss. In our opinion, taking into consideration the facts and circumstances of the case the loss occurred must be held to be a loss incidental to the business carried on by the assessee in Malaya during the war. We are fortified in our conclusion by the decision of the Bombay High Court in Pohoomal Bros. v. Commissioner of Income-tax. The facts of that case are somewhat similar to the facts before us. The assessee therein, which had its head office in Bombay and branches in various parts of the world, claimed deduction of the losses resulting fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance-sheet. The Special Commissioners held that no part of the sum of pound 477,838 recovered from the insurers was a trading receipt. But the House of Lords held that the whole sum recovered was trading receipt to be taken into account in computing the profits assessable to income-tax under Case 1 of Schedule D and to corporation profits tax. This court, in Nainital Bank's case, quoting that decision with approval, observed: "If receipt from an insurance company towards loss of stock was a trading receipt conversely to the extent of the loss not so recouped it should be trading loss." Next we shall refer to the decision of the Court of Appeal in London Investment and Mortgage Co. Ltd. v. Inland Revenue Commissioners. The facts of that c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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