TMI Blog1968 (12) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case, the assessee was eligible for deduction under section 12(2) of the sum of Rs. 26,800 representing uurealised dividends taxed in earlier years in computing the total income for the assessment year 1960-61 ? The assessee was a shareholder and director of the Famous Finance Corporation Pvt. Ltd., which was carrying on the business of distributing cinema films. The assessee held 1/3 of the subscribed share capital of the said company. He had made advances to the said company from time to time although he was not a money-lender and was not carrying on any money-lending business. The assessee, however, had other lines of business. In the assessment years 1950-51 to 1953-54, corresponding to S. Y. 2005 to S. Y. 2008, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal. With regard to the first item, the claim of the assessee is that it should have been allowed as a bad debt of his business under section 10(2)(xi) or at any rate it should have been allowed on the general principles of computation of the real income of business under section 10. As regards the second item, his contention is that, since the dividend amount has already borne tax in the previous years, on the assessee having failed to realise the amount, the same should be allowed as a deduction under section 12(2) or on general principles of equity. In our opinion neither of the contentions of the assessee is entitled to succeed. The findings of the departmental authorities and the Tribunal are that the assessee had no money-lend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 10(2)(xi) of the Income-tax Act. The argument that because the item was once subjected to tax should be allowed to be deducted on that score is, in our opinion, not capable of being justified at all. As to the other item of Rs. 26,800, the claim for deduction, in our opinion, is even less sustainable. What is allowed as a deduction under section 12(2) is expenditure incurred solely for the purpose of earning the dividend income. If the assessee failed to realise the dividend income, the non-receipt of the income will not amount to an expenditure incurred in earning it so as to be deductible under section 12(2). In our opinion, therefore, our answers to both the questions are in the negative. The assessee will pay the costs of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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