Law: Income Tax Act, 1922

Section: 10,10(2)(xi)

[Income Tax Act, 1922 (XI of 1922)]......Section 10(2)(xi)-Bad debt -Litigation for recovery of debt pending decision- Whether debt can be written off and claimed as deduction-Held no-Debt barred by time and legal action not fruitful-Whether admissible deduction-Held yes. B. Income Tax Act, 1922 (XI of 1922) -Section 10(4) (d)-Perquisites --Bank's property occupied by employee for residential purposes Bank not incurring any expenditure on providing residential facility-Notional value of properly, whether can be treated as perquisites-HeId no. C. Income Tax Act,1922 (XI of 1922)-Section 6-Head of income- Bank-Composite business-Bunk deriving income Wont various sources-Bifurcation of the trade into sub-trades for computing income under various sub-heads mentioned in Section 6- Whether permissible-Held no. D. Income Tax Act, 1922 (XI of 1922)-Section 10(2)(iii)-Interest on borrowed capital-Bank doing composite business-Interest paid by Bank on borrowed capital invested in tax free securities-Whether permissible deduction against profits of business-Held yes. Cases referred to :- Commissioner of Income Tax v. Indian Bank Ltd. (1966) [3 Taxation 39; Commissioner of Income Tax v. Gammon (Pale) Ltd., Karachi (1966) 14 Taxation 304 ; (1970) 22 Taxation 17 (Trib) and 21 Tax Cas 472. JUDGMENT [The order was passed by M.T. SIDDIQUI, President]. This appeal by a public limited company, carrying on banking business, questions a few add backs only in the following circumstances. 2. The first grievance is against five bad debts. The first disallowance of Rs. 30,000/- concerns a debt against A,,,& Co. The Income Tax Officer noted that a sum of Rs. 30,000/- was prematurely written off and, therefore, disallowed the same. The appellant's contention, as it was before the Income Tax Officer and is also before us, is that property to the above extent, belonging to the wife of the debtor, was mortgaged with the bank, but when the bank attempted to recover this amount from this property, the validity of the mortgage itself was challenged and this natter is still in dispute Therefore, the appellant has no hope of recovery. The Departmental Representative, on the otherh and,…

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