TMI Blog1951 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... a loan advanced by the assessee's money-lending business to the debtor. When later on there were payments, the debtor received credit for such payments in this account with the respondent and must have got a discharge receipt from him. He was thus recognised as a debtor of the new firm and the amount in question being a loan of the money-lending business of the respondent, it was an admissible deduction under section 10(2)(xi) of the Act. Appeal dismissed. - - - - - Dated:- 1-10-1951 - Judge(s) : KANIA., MAHAJAN., CHANDRASEKHARA AIYAR JUDGMENT The judgment of the Court was delivered by MAHAJAN, J.--This is an appeal from the judgment and order of the High Court of Judicature at Madras dated 26th August, 1948, delivered on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff the sum of Rs. 5,880, which was still due to him from the debtor out of the amount of Rs. 8,197, as irrecoverable. In the assessment year 1944-45 (accounting year 1943-44), the respondent claimed an allowance of the aforesaid sum of Rs. 5,880 as a bad debt under section 10(2)(xi) of the Act. The claim was disallowed by the Income-tax Officer. On appeal, the Appellate Assistant Commissioner allowed the claim and held that the bad debt had been taken over by the respondent as a part of the money-lending business and that the loss was sustained in the separate business carried on by him. On appeal, the Income-tax Appellate Tribunal confirmed this decision. On an application made to it, the Tribunal referred the following two questions fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the new business can be held to be loans made in the ordinary course of the new business ". While granting leave to the petitioner, the learned judges said as follows :-- The construction to be placed on the above words (i.e., 'loans made in the ordinary course of such business') is of great importance in this province having regard to the practice prevalent among Nattukottai Chettis in particular who conduct family money-lending business, that at a partition among the coparceners of the family the debts due to the undivided family firm are allotted between the several coparceners who, after the division, set up independent money-lending business treating the debts assigned to them as debts of the new business." The learned At ..... X X X X Extracts X X X X X X X X Extracts X X X X
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