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TMI Blog1961 (11) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... stion has been referred to us for our opinion under section 66(1) of the Indian Income-tax Act: "Whether, on the facts and circumstances of the case, the sum of ₹ 23,049 is an allowable deduction under section 10(2) of the Act?" The assessee who was carrying on business originally as a proprietary concern took a working partner, Shantilal Navalchand, on and from the 1st April, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, a capital loss. This view was affirmed on appeal by the Appellate Assistant Commissioner and on further appeal by the Appellate Tribunal. Hence this reference. The Tribunal has stated: "These debts which are now claimed to have become bad are those of the business carried on previously by the firm and, therefore, the deduction could be claimed only by that entity and, with the dissolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has, however, given a second reason in support of its conclusion, namely, that where the assessee took over the outstandings and started as it were his sole business, they became the assessee's capital and they lost the identity as debts due to the firm. Mr. Ranganathan, who appears for the department, supported this view and referred to a recent decision of this Bench in R. C. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, as the legatees became entitled to the stock-in-trade as owners by virtue of the bequest, there was no cost value to them and that they could, therefore, adopt the market value of the goods as the basis of valuation of stock-in-trade. We cannot see how the principles of that decision can at all apply to the present case where the assessee himself was a partner in the firm and continued the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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