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 - Allowable as - Assessment year 1949-50 - Assessee in money-lending business lent Rs. 2,03,300 from time to time to one 'AM' - In March 1930 debtor executed deed purported to be by way of sale, certain lands and houses in favour of assessee - After disposal of certain items, property having book value of Rs. 1,04,384 remained in assessee's possession and enjoyment - Assessee collected Rs. 1,82,860 by way of rent from those properties between 1930 and 1944 and this was assessed to tax - In 1940 debtor, filed a suit claiming that deed of 1930 was not absolute sale and as per oral trust, assessee was to retain properties only to realise his dues and was to retransfer properties and refund excess realisation - Assessee lost case and as per terms of settlement paid Rs. 1,35,000 to debtor for quitting their claims and collected Rs. 49,180 deposited by court receiver as rent in court - Assessee contended that properties acquired in money lending business constituted his stock in trade and claimed deduction of Rs. 1,04,384 and 1,35,000 as business loss or in alternative deduction of Rs. 1,82,860 - Whether since civil court had ultimately held that it was not a case of sale and properties were only placed in possession of assessee for realisation of his dues, properties covered by deed of 1930 did not become stock-in-trade in assessee's business and, hence, claim for deduction of Rs. 1,04,384 was not admissible - Held, yes - Whether payment of Rs. 1,35,000, less Rs. 49,180 realised from court, was of nature of refund of over-payment and, hence, assessee was entitled to deduction of Rs. 5,820 - Held, yes - Whether as there was no legal basis to treat Rs. 1,82,860 as any loss, claim for deduction of same was not admissible - Held, yes FACTS The assessee as the karta of an HUF was in money lending business in Ceylon. He lent money to one 'A.M.' totaling nearly two lakhs of rupees up to the beginning of March, 1930, and on 3-3-1930, the debtor executed a deed purporting to convey absolutely to the creditor by way of sale certain houses and lands for…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492