O RM OM RM PL MUTHUKARUPPAN CHETTIAR, MINOR BY MOTHER AND GUARDIAN, MEENKSHI ACHI Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) The assessee was a partner in a firm carrying On a money-lending business at Penang under the style of O. RM. OM. and as such had an interest in the business of a sub-partnership trading under the style of OM.PS. The business of the sub-partnership was also carried on at Penang. The firm of O. RM. OM. was dissolved on the nth January, 1939 and between that date and the 26 March, 1939, the assets of the business were realised. After the nth January, 1939, no business was transacted, beyond that involved in the realisation of the assets. One of the assets was sold to a stranger; all the other assets were sold to members of the firm. The winding up of the O. RM. OM. partnership meant, of course, the winding up of the subsidiary partnership as well.

(2.) This reference relates to the year of account which ended on the 13 April 1939- The assessee claims that in assessing his income as a partner in these businesses an aggregate sum of ? 1,38,349 should be treated as representing trading loss This figure is arrived at by deducting the sums realised in the course of the winding up from the values of the assets as shown in the books of account

(3.) By an order dated 24 the August, 1942, this Court directed the Commissioner of Income-tax to state a case on the following question. Is the loss claimed by the assessece in this case of a capital nature or kis it a loss deductible in the year of account?