Judgement

SHAH, J.: Under an agreement dated January 2, 1931 Lala Manmohan Das-hereinafter called the assessee - was appointed Treasurer of the Allahabad Bank Ltd. in respect of certain Branches, Sub-Agencies and Pay Offices. The assessee was assessed to income-tax as representing his Hindu undivided family, and the income received by the assessee under the terms of the agreement with the Allahabad Bank was treated as income of the Hindu undivided family. In the previous year corresponding to the assessment year 1950-51 the assessee in performing his duties as a Treasurer suffered a net loss of Rs. 38,027/-. For the assessment year 1951-52, the profit and loss account of the assessee showed Rs. 73,815/- as receipts, against which were debited outgoings amounting to Rs. 39,370/- which included Rs. 20,000/- being the loss suffered by the assessee as Treasurer of the Patna Branch of the Allahabad Bank arising from misappropriation by an Assistant Cashier. The Income-tax Officer refused to allow the loss suffered in the previous year to be set off against the net profit of Rs. 34,445/- and brought that amount of profit to tax as remuneration received by the assessee as Treasurer of the