TMI Blog2001 (3) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal, we are concerned with the assessment year 1984-85. The last day of the accounting year was June 30, 1983. On that day, Greaves International Ltd. entered into an agreement with its sister concern, Greaves Cotton Ltd. Under the said agreement, Greaves International Ltd., assigned doubtful debts of Rs. 68,70,943.27 for a price of Rs. 21,33,987 to Greaves Cotton Ltd.-appellant herein. The amount of Rs. 21,33,987 was the recoverable amount out of the total doubtful debts of Rs. 68,70,943.27. This was as per surveyor's report also dated June 30, 1983. On July 1, 1983, Greaves International Ltd. got merged into Greaves Cotton Ltd., the appellant herein. The assessee-Greaves International Ltd. claimed deduction in respect of the bad debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-offs were in respect of bad debt. This was disallowed on the ground that on June 30, 1983, there was a sale of the debts amounting to Rs. 68,70,943.27 for Rs. 21,33,987. Therefore, the Commissioner of Income-tax (Appeals) rightly held that the said write-offs were not of bad debts but of loss on sale of the assessee's rights in the shape of debts/advances. The assessee had called for the report of their own surveyor. The report was submitted on June 30, 1983. The deed of assignment was executed on June 30, 1983, and the assessee-company got merged into the appellant-company on the next day. We do not have the basis of the surveyor's report. In view of the facts and circumstances of the present case, there was no trading loss. It was a sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk were held in securities and the business of banking included dealings in such securities. That the transactions carried out by josna Bank were in the course of its business. That the sale of securities and shares by josna Bank was in the course of its business and, therefore, the loss suffered by it in the matter of sale of its securities to Krishna Bank Ltd. was a trading loss. In the present case, the assessee was a trader in goods. There is no evidence to show that lending of monies was a part of their business. Hence, the judgment in Josna Bank Ltd. v. CIT [1974] 97 ITR 72 (Ker), has no application. As stated above, this was not even the plea of the assessee before the Assessing Officer. It was not even pleaded before the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such a sale would constitute a realisation sale and the amount received by the transferor was not liable to be taxed. However, in cases where there was a sale of a particular item of assets for a stated consideration, the loss was allowable as a deduction. As stated above, all the aforestated points need proper evidence to be led by the assessee. In this case, there is no basis disclosed by the assessee. Therefore, the judgment of the Madras High Court reported in CIT v. Pathinen Grama Arya Vysya Bank Ltd. [1977] 109 ITR 788, has no application. Whether a loss incurred is a trading loss or capital loss is essentially a question of fact. In the circumstances, the appeal stands dismissed with no order as to costs. C. C. expedited. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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