MALIK, J. - (1.) THE point raised in this reference under Section 66(1) of the Income -tax Act is: 'Whether under the circumstances of the case Income -tax Appellate Tribunal was right in disallowing the bad debt of Rs. 26,251/ - and the proportionate costs under question?'
(2.) THE assessee is Seth Madan Gopal Bagla, an individual. He was a partner in two firms, Harnandrai Phoolchand at Calcutta and Phool -thand Mohanlal at Kanpur. There were two other partners in these firms, Raj Bahadur Chiranji Lal and Seth Pearey Lal. There was a dissolution of partnership and a sum of Rs. 48,510/ -was found due to the assessee as his share of the partnership assets of the Calcutta firm and a sum of Rs. 14?541/ - was found due to him ashis share of the partnership assets of the Kanpur firm. Besides these two items there was a third item of Rs. 29,463/ -. Raj Bahadur Chi -ranji Lal was the guardian of the assessee's father, L. Kashi Nath, who was a lunatic. He misspent or had failed to account for the money which had come to his hands as the guardian of the lunatic and had been held liable to the extent of Rs. 29,463/ -. We are not concerned with this third item. The claim against R. B. Chiranji Lal together with interest and costs amounted to over a lac but the claim was settled by transfer of certain properties valued at Rs. 54,000/ -. The balance was written off as bad debt and the assessee claimed that he was entitled to reduction in respect of that amount. The Appellate Tribunal worked put the proportion in which the sum of rupees fifty -four thousand was to be divided between the three items mentioned above and, while allowing a set off with respect to the last item, disallowed a set off with regard to the first two.
(3.) THE assessee made an application that three questions of law may be referred to this Court but the Tribunal referred only one question which we have quoted above. The other two questions were disallowed. An application was made to this Court that the other two questions be also referred and some additional questions were also framed. That case is numbered and registered as Miscellaneous Case No. 66 of 1948. The two cases have been put up before us together for orders.;