RAJA MOHAN RAJA BAHADUR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under section 66 of the Income-tax Act. Three questions have been referred to this court for opinion :

(2.) THE assessment year in question is 1948-49 relevant to the accounting period the financial year ending March 31, 1948. THE facts giving rise to the reference are that the assessee which is a Hindu undivided family carries on a money-lending business. In the course of that business it advanced a sum of Rs. 2,58,000 during the years 1919-1926 to Sri Nizar Ahmed Khan, a Taluqdar. In due course a suit had to be filed for realisation of the debt and it was fought up to the Privy Council. Ultimately a decree was passed in favour of the assessee. THEreafter the debtor made an application under the U. P. Encumbered Estates Act and in due course a decree was passed by the special judge under section 14 of that Act and finally a sum of Rs. 5,00,992 was received by the assessee in full satisfaction.

(3.) THE assessment was completed by order dated January 23, 1951.