N A PAUL Vs. CIT

JUDGEMENT

(1.) This is a reference by the Income Tax Appellate Tribunal, Madras Bench, under S.66(1) of the Indian Income Tax Act, 1922. The assessment year concerned is 1958-59; and the accounting period is the Malayalam year 1132 which commenced on 16-8-1956 and ended on 16-8-1957.

(2.) Of the three questions referred, the second reads as follows:-

(3.) The assessee credited the amount due to each of his constituents out of the sum of Rs. 93,572/- in their respective accounts with him; but did not pay them because of the difficulties experienced in remitting money from Burma to Cochin as a result of the restrictions imposed by the Government of Burma. The constituents started clamouring for payment and there were even threats of suits for recovery. Litigation, however was avoided by a compromise under which the assessee liquidated his liabilities to the extent of Rs. 81,390/- out of the total liability of Rs. 93,572/- by paying to his constituents Rs. 45,815/- and his constituents waiving their right to get the balance of Rs. 35,575 from him. It is this sum of Rs. 35,575/- which is mentioned in the question extracted above.