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PETITIONER: THE COMMISSIONER OF INCOME-TAX, BOMBAY CITY I
Vs.
RESPONDENT: M/S. JAGANNATH KISSONLAL, BOMBAY
DATE OF JUDGMENT: 24/11/1960
BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C.
CITATION: 1961 AIR 748 1961 SCR (2) 644 CITATOR INFO : R 1961 SC 668 (8) R 1965 SC 321 (18)
ACT: Income Tax--Money borrowed by two Persons for business pur- Poses on joint and several liability--One failing to pay his share--Whole Paid by another--Unpaid sum by Co-borrower--If deductible as business loss--Commercial custom of joint borrowing--Mutuality--Indian Income Tax Act, 1922 (11 of 1922), S. 10(2)(XV).
HEADNOTE: For the purposes of its business the respondent borrowed a certain sum of money from the Bank of India on a pronote executed jointly by him and one Kishorilal in accordance with a commercial practice of carrying on business by borrowing money from Banks on joint and several liability. The money was divided half and half between the respondent and Kishorilal but Kishorilal failed to pay off his liability as he became a bankrupt and the respondent had to pay the whole amount to the Bank. The respondent, however, received from the Official Assignee a part of the sum taken by the Kishorilal leaving a balance still unpaid. The respondent’s claim to deduct this unpaid balance under s. 10(2)(XV) of the Inc...