Law:

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Income-tax Act, 1922 -- Sections 3, 10, 10(2)(xi), 23 -- Bad debt -- Decretal amount written off as bad debt because further litigation not found advisable -- Amount, whether admissible as admissible deduction -- Held yes -- Income or capital -- Co-operative bank -- Sale of PICK shares for purchase of shares of certain cotton mill at the direction of Co-operative society and partly for construction of building -- Profits arising out of sale of PICK shares -- Whether capital gain -- Held yes -- Bad debt -- Authorities below proceeding on basis that claim was a trading debt and Appellate Assistant Commissioner allowing same -- Nothing to show that authorities had erred in facts of case -- Department's contention that claim was not a trading debt, without corroboration -- Held, cannot be accepted, in circumstances of case -- Sale of shares effected not in course of breaking business but partly due to direction of Registrar, Co-operative Societies and partly due to requirements of construction of a building -- Deletion of amount of profit arising from such sale upheld -- Corresponding Sections: Income-tax Ordinance, 1979 -- Section 9(1) -- ORDER The order was passed by A. AHMED, Accountant Member.---This appeal which relates to the charge year 1963-64 arises out of an order of the Appellate Assistant Commissioner. The assessee is a co-operative Society trading in various types of commodities. The objections taken by the department read:- 1. "On the facts and in the circumstances of the case the learned A.A.C. was not justified in deleting the disallowance of Rs. 49,354 on account of Remission alleged to have been allowed to Mr. W without investigating as to whether it was at all a Trading debt." 2. "On the facts and in the circumstances of the case the learned A.A.C. was not justified in holding that the profit arising from the sale of PICK shares was capital gain and in deleting the sum of Rs. 83,315 from the total income of the assessee." 2. Ground No. 1. In disallowing Rs. 49,304 claimed as remission the Income-tax Officer noted, that recovery had been restrained by Court but that the amount had not become irrecoverable and that there was nothing to show that…

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