PANDIT LAKSHMI KANT JHA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference under Section 256(1) of the I.T. Act is by the Income-tax Appellate Tribunal, Patna Bench.

(2.) THE late Maharajadhiraja Sir Kameshwar Singh, now represented through Pandit Lakshmi Kant Jha, executor, was the holder of an impartible estate called Darbhanga Raj. He was assessed as an individual, both in respect of his extensive zamindari properties as well as money-lending business. In the assessment year 1958-59, the corresponding accounting year ending with 31st March, 1958, a sum of Rs. 29,16,000 was claimed by Maharajadhiraja Sir Kameshwar Singh (hereinafter to be referred as " the assessee " for the sake of brevity) for allowance as bad debt in respect of money-lending business. This claim was disallowed by the ITO and the assessee's appeals on the point both before the AAC and the Income-tax Appellate Tribunal were unsuccessful. This question now falls for consideration in this reference.

(3.) IT is on the basis of these letters that Dr. Pal has submitted that the transactions evidenced by the two zarpeshgi deeds of lease were really security for the loans advanced by the assessee and that these letters are, therefore, relevant for culling out the true import of the two zarpeshgi deeds of 1931 and 1936. According to learned counsel, therefore, the decision of the Supreme Court, mentioned above, which was made without reference to these letters, cannot be held to be final adjudication as to the real import of the documents, specially when the question whether the income from the leasehold property being from land would fall within the definition of " agricultural income " was not seriously contested by the parties before the Supreme Court.