TMI Blog1974 (6) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ered under-broker. In lieu of salary, P. J. Doshi was allowed brokerage in respect of transactions which passed through him. As the brokerage was adjusted only periodically, Doshi used to draw advances from the assessee-firm every month in anticipation of accruing brokerage. Doshi fell ill and could not submit his bill for adjustment of brokerage for a few years as he was lying ill for a long time. Ultimately he died. In the circumstances, the assessee thought if fit that the advances which had been paid to Doshi in anticipation of accruing brokerage, which amounted to Rs. 58,312, be written off in the relevant previous year. The assessee, accordingly, claimed this amount as a bad debt under section 10(2)(xi) of the Indian Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for the sum of Rs. 58,312 should be allowed under section 10(1) of the Indian Income-tax Act, 1922. On an application being made by the revenue the Tribunal has referred the following question to this court under section 66(1) of the Indian Income-tax Act, 1922 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs. 58,312 written off against P. J. Doshi at the end of the relevant previous year was allowable under section 10(1) of the Indian Income-tax Act, 1922, in the assessment for the year 1953-54 ?" It is true, as counsel for the revenue contended before us, that in respect of this business the basis of accounting was cash. It was, therefore, urged that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Badridas Daga v. Commissioner of Income-tax cannot be disputed. The question, however, is whether in the relevant year the assessee was entitled to this amount to be debited under section 10(1). It is true that the assessee followed a cash system of accounting in respect of this transaction. But the assessee was not claiming this item as under-brokerage paid or advances made to the under-broker. It was not claimed as business expenditure. It was being claimed because this amount was a loss in the business in the relevant year. The loss is stated to have arisen as a result of the death of Shri Doshi; because of the death of Shri Doshi this amount became irrecoverable and was a loss to the assessee. There is, however, no definite f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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