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PETITIONER: COMMISSIONER OF INCOME-TAX, BOMBAY
Vs.
RESPONDENT: M/S. ABDULLABHAI ABDULKADAR
DATE OF JUDGMENT: 06/12/1960
BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C.
CITATION: 1961 AIR 701 1961 SCR (2) 949 CITATOR INFO : R 1964 SC1722 (9) R 1966 SC1250 (5)
ACT: Income-tax--Commission Agent’s liability to pay for non- resident principal--Test of deductible business loss--Indian Income-tax Act, 1922 (11 of 1922), ss. 10(1), 10(2)(Xi), 42(1), 43.
HEADNOTE: The respondent was a registered firm carrying on business as commission agents, and for the purpose of income-tax it was treated as the agent of a non-resident principal doing business outside India. Under s. 42(1) of the Indian Income-tax Act the respondent was deemed to be the assessee and had to pay Rs. 3,78,49r as income-tax on behalf of the non-resident principal. After allowing for the amounts lying with the respondentfirm the account of the non- resident principal showed a debit balance of RS. 3,20,162. The respondent treated this amount as a bad debt and claimed it as a deductible loss. The Incometax Officer and the Appellate Assistant Commissioner disallowed the respondent’s claim but the Income Tax Appellate Tribunal held it to be an allowable deduction being a bad debt incurred as a result of the respondent’s business activities with ...