FATEHCHAND MOONAT Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 (for short "the Act"), the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following question of law for the opinion of this court:

(2.) THE material facts giving rise to this reference as set out in the statement of the case are as follows : Firm, M/s. Sagarmal Fatehchand and Company, consisted of several partners up to the assessment year -1971-72, i.e., the accounting year ending on Diwali, 1970. THE firm was reconstituted from Diwali 1970. Other former partners of the firm retired and the firm was reconstituted with two partners, viz., Sagarmal and Jhamaklal representing the HUF of M/s. Jamaklal Juharmal. THE firm was again dissolved and all its assets and liabilities were taken over by Shri Sagarmal with effect from Diwali, 1971. A sum of Rs. 20,390 was due from the firm to the assessee, Fatehchand. THE outstanding closing balance of Rs, 35,390 standing to the credit of the HUF of M/s. Jhamaklal Juharmal was first brought to batau khata. THEreafter, it was shown to have come to an end in the books of the dissolved firm and taken over by Sagarmal. THE assessee continued to show these amounts due against Sagarmal Fatehchand which were ultimately written off during the assessment year in question.

(3.) THE finding recorded by the AAC has been confirmed by the Appellate Tribunal. On this finding the Tribunal was fully justified in holding that the assessee could not be allowed the said amount as his revenue loss during the assessment year 1975-76.