Shah, J. - (1.) In the proceedings for assessment of income-tax for the year 1950-51, the assessees, who are a public limited company carrying on the business of banking, claimed that an amount of Rs. 4,22,582 due in the account of Messrs. Nandlal Inderchand, having been actually written off as irrecoverable in the year of account 1949, they were entitled in the assessment of the profits of that year to be allowed the amount as a bad and doubtful debt under section 10(2) (xi) of the Income Tax Act. The amount of Rs. 4,22,582 consisted of three items as follows :(a) Rs. 2,11,089 due from the firm styled Messrs. Nandlal Inderchand under an account which commenced in the year 1943. In this account the debtor had pledged shares of the value of Rs. 28,000 odd. (b) Rs. 1,02,325 originally due from a firm carrying on business in the name of B. I. G. Co., Calcutta. (c) Rs. 1,09,168 originally due from a firm carrying on business in the name of Fulchand Srinarain, Calcutta.
(2.) For the amounts due under the accounts styled Messrs. B. I. G. Co. and Fulchand Srinarain, there was no security. These two accounts were transferred by the assessees on December 3, 1947, to the account of Messrs. Nandlal Inderchand and amalgamated with that account.
(3.) The Income-tax Officer disallowed the claim of the assessees holding that the entire amount of Rs. 4,22,582 had become irrecoverable in 1947 and not in the year of account 1949. The Appellate Assistant Commissioner held that the amount of Rs. 2,11,089 originally due in the account of Messrs. Nandlal Inderchand had not become irrecoverable in 1949 but had become irrecoverable in the year of account 1950, and that the amount due in the other two accounts - B. I. G. Co. and Fulchand Srinarain - had become irrecoverable in the year 1947, and the assessee were not entitled to treat the entire amount of Rs. 4,22,582 as a bad debt in the year of account 1949. The Income-tax Appellate Tribunal accepted the findings of the Appellate Assistant Commissioner that the amounts due from the B. I. G. Co. and Messrs. Fulchand Srinarain had become irrecoverable in the year of account 1947 and could not be allowed as bad or doubtful debts in the assessment of profits for the year of account 1949. The finding of the Appellate Assistant Commissioner about the amount due from Messrs. Nandlal Inderchand was not challenged before the Tribunal and, in this appeal; we are not concerned with the disallowance of that amount.;