2657.txt

The current legal case involves an appeal by a business involved in various industries and money lending against the disallowance of a deduction of Rs. 2,68,385/ as bad debt due from a bankrupt firm. The Income Tax Officer and Appellate Assistant Commissioner disallowed the deduction, stating that the transactions were accommodations with no bearing on the assessee's regular business. The case was referred to the High Court, which opined that the debt was not a bad or doubtful debt in the assessee's money lending business or other business. The case was then appealed to the Supreme Court, which reframed the question referred to the High Court and directed the tribunal to submit a further statement. The tribunal found that the monies sent by the assessee to the bankrupt firm were not loans made in the ordinary course of its money lending business or any other business. The Supreme Court answered the reframed question in favor of the Department, and the appeal was dismissed. No costs were awarded.