COMMISSIONER OF INCOME TAX Vs. OPPOOTTIL AGENCIES

JUDGEMENT

(1.) THE question referred to this court by the Income-tax Appellate Tribunal, Cochin Bench, reads as follows :

(2.) TILL February 1, 1974, there was a firm in which there were three partners and a minor admitted to the benefits of the partnership. All the partners retired on February 1, 1974. The minor along with three other persons reconstituted the firm. The assessee-firm claimed certain deduction by way of bad debts during the year in question. The Income-tax Officer did not allow the deduction holding, firstly, that there was no reconstitution of the firm, and, secondly, that there was no proof of bad debts in existence or steps having been taken to recover the same. The Appellate Assistant Commissioner of Income-tax in appeal held that the assessee was entitled to claim the deduction inasmuch as there was reconstitution of the firm. The Tribunal having confirmed the order of the Appellate Assistant Commissioner in appeal, declined to grant the directions sought. The Tribunal allowed the deduction holding that it was a case of reconstitution of the existing firm and also that it was a case of bad debts.

(3.) THE only other contention raised by the counsel for the Revenue is that the assessee had failed to prove that there were bad debts during the year. In support of this contention the decision in Niranjan Lal Ram Chandra v. CIT [1963] 49 ITR 177 (All) (sic) and Munnalal Biharilal v. CIT [1956] 30 ITR 809 (Nag) were cited. He has also a case that the burden of proof in regard to the bad debts is on the assessee. THE Tribunal having considered all the aspects of the matter found that it was really bad debts with respect to which the assessee was entitled to claim deduction. This being a question of fact, really no question of law, in our opinion, arises in the matter.