COMMISSIONER OF INCOME TAX Vs. HANUMANDAS HIMATSINHKA

JUDGEMENT

(1.) THIS is a reference under Section 66(2) of the Income-tax Act at the instance of the Commissioner of Income-tax, Bihar and Orissa. The question which has to be answered in this reference is :

(2.) THE claim of bad debt in question relates to the accounting period June 29, 1957, to June 18, 1958, the assessment year being 1959-60.

(3.) APPEARING for the petitioner the first question that has been raised by Mr. Ugra Singh is that the supplementary statement of the case does not comply with the directions of this court inasmuch as the Tribunal has not stated whether the advances in question were in the ordinary course of money-lending business by the assessee to the Bihar Agents Private Ltd. Shri Lal Narain Sinha the learned Advocate-General who appeared for the assessee urged that, on a fair reading of the supplementary statement of the case along with the order of the Tribunal dated July 24, 1963, it is clear that the Tribunal has come to the conclusion that the loan in question was advanced in the ordinary course of money-lending business. I am of the view that the contention put forth on behalf of the assessee is correct. At the very beginning of the supplementary statement of the case the directions of the High Court have been quoted, which directions clearly state that the Tribunal had to find out whether the loan advanced was in the ordinary course of money-lending business. It is in this context that the findings and conclusions of the Tribunal have to be read and appreciated. In the order of the Tribunal it has been stated that the assessee had a money-lending licence which permitted him to lend sums within the limit of rupees five lakhs. The Tribunal further found that various amounts have been received by the assessee by way of interest between the years 1955-56 to 1959-60. That, even from the Bihar Agents Private Ltd. the assessee had received interest in all those years. On these and other facts, it was held that the assessee was carrying on money-lending business and that his cash advances to Bihar Agents Private Ltd. were in the course of money-lending business. The supplementary statement of the case discloses that the Tribunal, having examined the accounts, found that cash advances had been made in various years by the assessee to Bihar Agents Private Ltd., and came to the final conclusion that at the end of Ratha Jatra 2009 2010, a sum of Rs. 2,48,119 was due to the assessee and the entire sum represented money-lending advances by the assessee to the debtor. It is thus clear that on a fair reading of the order of the Tribunal and the supplementary statement of the case there can be no doubt that the Tribunal has come to the conclusion that the amount due to the assessee from the Bihar Agents Private Ltd. was in respect of loan advances in the ordinary course of money-lending business. The mere omission of the expression "ordinary" in the findings recorded by the Tribunal in the supplementary statement of the case is, in the circumstances of this case, not of any consequence. It appears to me that the purpose of calling for the supplementary statement of the case was not to ascertain whether the loan advanced was in the ordinary course of money lending business but to find out which part of the entire sum of Rs. 2,46,510 was money-lending advance in the ordinary course of business and which part, if any, was cash advanced otherwise than in the course of money-lending business. The Tribunal found that no part of this amount was attributable to advances other than in the ordinary course of money-lending business. The contention of the petitioner, therefore, cannot, in my view, be accepted.