Law:

Section:

Section 28(i) of the Income-tax Act, 1961 [Corresponding to section 10(1) of the Indian Income-tax Act, 1922] - Business loss/deductions - Allowable as - Assessment year 1958-59 - Assessee had mortgage decree against 'G' said decree was later assigned by assessee in consideration of Zarpeshgi thika lease - Assessee remained in possession of properties for about sixteen years and made collection thereform till properties vested in State - Compensation was paid to assessee in respect of Zarpeshgi properties and balance amount of consideration was claimed by assessee as irrecoverable loan and bad-debt - Tribunal disallowed claim on ground that thika properties were not security for loan; that income from zarpeshgi thika lease was agricultural income and not net income from money land in business and property involved was agricultural property - Whether, finding of Tribunal could not be said to be erroneous and thus balance amount could not be claimed as bad debt - Held, yes FACTS The assessee had mortgage decree of Rs. 31,54,936 against 'G'. In the year 1931, the assessee assigned the decree in favour of 'R' for the consideration of the decretal amount. Out of the consideration, Rs. 1,04,936 was paid in cash and for the balance amount of Rs. 30,50,000 a Zarpeshgi thika lease was executed by 'R' in favour of the assessee. Thereafter on request of the wife of 'R', the assessee assigned the said Zarpeshgi thika lease in her favour for a consideration of Rs. 30,50,000. The wife of 'R', paid Rs. 50,000 in cash and for the balance she executed a Zarpeshgi thika deed in favour of the assessee in respect of some properties which she got from 'G'. The wife of 'R' again obtained loan from the assessee and a fresh thika lease was executed in 1936, for an amalgamated amount of Rs. 47,61,000 for a period of twenty-eight years from 1963. The assessee remained in possession of the Zarpeshgi thika properties and made collections there from. This position continued till 1952, when the properties comprised in the thika lease aforesaid vested in the State under the provisions of the Bihar Land Reforms Act, 1950. The assessee then filed a claim case under section 14 of the Bihar land…

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