JEKISONDAS TRIBHUVANDAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal has submitted a statement of the case as required by us under section 66 (2) of the Income-tax Act, and the statement disclosed the following facts. The assessee suffered losses in bullion in the year of account. He dealt in this commodity both on his own account and as a broker for his constituents and he claimed that he had acted as a broker for nine constituents, that these constituents had not discharged their liability. that he had paid on the Bullion Exchange the amounts due by these persons had become irrecoverable, and therefore he claimed the amounts as bad debts. The two questions which we asked the Tribunal to refer were :

(2.) Mr. Palkhivala has strenuously argued the second question and has contended that as far as the second question is concerned he must succeed, whatever the view may be of the Tribunal with regard to the debtors being genuine or not. Now, out of these nine debtors, it has been found by the Tribunal that the first four were not the genuine constituents of the assessee. The first three names are the names of one party who according to the assessee traded in three names, and therefore these four names really represents two constituents, and with regard to the other five the Tribunal has held that these constituents were genuine constituents, but their debt did not become bad in the year of account.

(3.) Turning to the case of the first two constituents, where it has been held that they were not genuine constituents, what Mr. Palkhivala has argued is that if he satisfies us that he actually paid the loss to the Bullion Exchange, then if the loss was not paid on behalf of his constituents it must follow as an irresistible inference that the loss was paid by him as his own business loss, and therefore if the amount represented by this loss was not deductible as a bad debt, it was open to the assessee to claim a deduction as a loss under section 10 (2) (XV). It has been pointed out by the Tribunal that at no stage it ever suggested by the assessee that these losses were his own business losses. Throughout the proceedings, whether it was before the Income -tax Officer, the Appellate Assistant Commissioner or the Tribunal, it was strenuously urged by the assessee that these two constituents had given him instructions to put through the transactions, that he had acted as their broker, and that the loss suffered was the loss of the constituents and not his loss. It is difficult to understand how it is possible for Mr. Palkhivala now to urge before us that we should give him relief on the basis that these were his business losses and not losses of his constituents. Mr. Palkhivala says that it is open to him to set up alternative cases. An alternative case may be set up when two inferences are possible from the same set of facts, but it is difficult to understand how a party can put forward one set of facts and in the alternative a set of facts which are entirely inconsistent with the first set. Therefore, it is not open to Mr. Palkhivala on the record as it stands to urge before us the finding of fact which is contrary to the fact relied upon consistently and emphatically by the assessee throughout these proceedings.