CHAGAN MAL BASTIMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal has referred the following two questions of law arising out of its order dated December 18, 1981, in respect of the assessment year 1974 -75:

(2.) THE brief facts of the case are that the assessee was due to receive a sum of Rs. 1,35,681 from Kaluram Nemichand of Beawar. For the assessment years 1962 -63 to 1964 -65, the debt was claimed as bad while computing the income of the assessee. The claim was rejected as premature by the income -tax authorities. The matter was ultimately challenged before this court under Section 256 and finally the application under Section 256(2) was rejected on. April 19, 1978.

(3.) LEARNED counsel for the assessee relied upon the decision in the case of CIT v. K. N. Oil Industries : [1983]142ITR13(MP) wherein it was held that even if the relief has not been claimed in the assessment proceedings, it can be claimed by rectification of assessment. The decision in the case of CIT v. Sarju Prasad : [1984]148ITR718(All) has also been relied upon that if there was failure to file estimate within time it could move the Tribunal for rectification under the Act. The decision in the case of CIT v. Mattoo Worsted Spg. and Wvg. Mills has also been relied upon that if the conditions set out in Section 80J are satisfied and the claim was not made in the original assessment rectification is permissible. It is stated that in view of the decision in the case of Addl CIT v. S. RM. PL Subramania Chettiar : [1979]119ITR925(Mad) the debt had become bad on the date when the final dividend was received in the insolvency proceedings. In this case, the final dividend was declared on October 19, 1973, and as such the debt had become bad during the accounting period ending Diwali 2030 (October 26, 1973), relevant to the assessment year 1974 -75.