LexAMARCHAND SOBHACHAND versus COMMISSIONER OF. INCOME TAX, MADRAS
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~· A B c 0 E F G AMARCHAND SOBHACHAND v. COMMISSIONER OF. INCOME TAX, MADRAS July 29, 1969, April 7, 1970 & Januarv 21, 1971 [J, C. SHAH, C.J., K. S. HEGDE AND A. N. GROVER, JJ.] 415 Inoo111e-lllx Act. 1922, s. 10(2)(vi), s. 66(1)-Bad debt-May relate 10 nioney [ending business of assessee or olher business--Question referred by tribunal to Higlz Court n111st corer both businesses u·hen the .c/aini can be related to either-Staten1ent of cuse 1nust contain Tribunal's findings on the facts of the case-Must not be 111ere resume of facts and arg111nents. Supre111e Court Practice-Appeal hy special leai:e against High Court's judg1nent in l11co111e~tax Refere11ce-S11pren1e Court lvi/I not interfere 1''ith finding of /"ct given by Tribunal 011 the evidence recorded in the case. The appellants were a registered partnership firm engaged in money- Jending business as '.well as business in certain chemical goods and silk yarn. Another firm had a current account v:ith the appellants between the samvat years 2003 and 2008. At the end of the latter year the said account had a debit balance of Rs. 268385-1-3. In the return of income for the assess- ment year 1953-54 the appellants claimed allowance for the said sum of Rs. 268385 as a bad debt \\'fitten off as irrecoverable. The clain1 \\'as <lis- allo\ved bv the authorities under the Jncome-tax Act, 1922. The Tribunal referred to the High Court under s. 66(2) of the Income-tax Act, 1922 the question \.rhether on the iacts and circumstances of the case the Tribu- nal's finding that the sum in question did not relate to the appellants mooey- Iending business was correct. The High Court answered the question in the affirmative against the appellants. This Court in appeal by special leave re-framed the question to be ans\\'ered by the T ribunaI so as to cover not only the money-lending business of the nppellants but also the business in chemicals etc. The Court directed the Tribunal to suhmit a suppl~men tary statement of case. The. supplementary statement of case suhinitted by the Tribunal was ho\\·ever found unsatisfactory in as much as . it con- tained a summary of arguments on both sides but no findings on the facts of the case. Hence supplementary statement on fact. was called for. The findings given by the Tribunal were against the appellants. On the con· tention that the conclusion reached by the Tribunal was not supported by proper discussion of the materials before it, HELD : The finding• reached by the Tribunal were findings of fact and those findings were supported hy the evidence on record. The Tribunal had. found that the loans w.erc not made in the course of money-lending business of the assessee nor 1n respect of anv other husiness of the assessce. This finding covered the entire amount so'ught to he deducted. In vic\Y of this finding \\.:hich was bintlinJ? on this Court, the .lllS\\·tr to the ques- tion re-framed had lo be in favour of the department. j-12.1 BJ Also held : (i) The Tribunal in submilling its slalcmcnl of case must give not only the facts of the case or the arguments of p;,1rties hut also its own findings on the facts and evidence. j-110 DJ H (ii) When the assessee had money-lending as well as other business. its claim for a bad debt under s. IO(!)(xi) of the Act must be considered in relation 10 both the busine.,.cs and the question submitted by the Tribunal must cover the cfoim in both its aspects. [418 F-419 Al 416 SUPREME COURT REPORTS [1971]3 S.C.R. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 949 of 1966. Appeal by special leave from the ju~gment and order dated September 11, 1964 of the Madras High Court in Tax Case No. 181 of 1962. A M. C. Chag/a and B. R. Aganvala, for the appellant. B S. T. Desai, R. N. Sachihey and B. D. Sharma, for the respon- dent. [The appeal was originally heard by J. C. Shah, Ag. C.J., V. Ran;iaswami and A. N. Grover, JJ. The case was twice re- manded to the Tribunal. The first Order of the Court remanding C the case to the Tribuinal was delivered by] Shah, Ag. C. J. M/s Amarchand Sobhachand a firm re- gistered under the Indian Income-tax- Act, 1922, carried. on busi- ness at Madras in drugs, chemicals, mercury, camphor and silk yarn and as money lenders. There were two partners of the firm -Mohanlal Sagmal and Seshmal Sobhachand, and Ramniklal D and Lakshmichand minors were admitted to the benefits of the partnership, each with
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