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TMI Blog1970 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 66(1) of the Indian Income-tax Act, 1922, hereinafter referred to as the Act, on the following question : " Whether the amount of Rs. 39,302 which was found due on account of interest charged from Jagannath, working partner, and which was written off because it could not be recovered, can be allowed as a deduction from the total income of the previous year (Samvat 2011-Samvat 2012) be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following two items : (i) Rs. 55,242, on account of excess drawings and losses during the period Samvat 2000 to Samvat 2012 ; and (ii) Rs. 39,302, on account of interest charged during the said period. At the end of the relevant previous year the assessee wrote off the entire sum of Rs. 94,544 and in the assessment for the assessment year under reference, it claimed the amount as a revenue loss. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o carry on business in arhat as well as in gur and shakkar. The amount in question cannot, therefore, be regarded as a trading debt. Moreover, the assessee-firm, which is a successor to the original firm of nine partners, took over the business with all its assets and liabilities which constituted the consideration for such take over. That being so, the amount in question, which is an asset in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ums and the loss could not be written off as against the profits of the year in which they were written off. In our opinion, the point has been correctly decided by the Tribunal and the question referred must be answered in the negative and against the assessee. The respondent will get Rs. 200 as costs of this reference from the assessee. Counsel's fee is also assessed at the same figure. Questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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