Judgement

SHAH, J.: The appellant, a Hindu undivided family, carries on the business of money-lending and maintains its accounts on cash basis. The appellant commenced an action in the Civil Court for a decree for recovery of Rs. 2,58,000 due by Nisar Ahmad Khan, Taluqdar of Mohana Estate. The action was carried to the Judicial Committee of the Privy Council and was ultimately decreed in favour of the appellant. Nisar Ahmad Khan then obtained under the U. P. Encumbered Estates Act 25 of 1934 an order applying the provisions of the Act to him. The special Judge, Sultanpur, passed an order for payment of Rs. 5,00,992 to the appellant. Pursuant to the order the appellant received in 1946 Rs. 1,54,692 from the debtor and for the balance the Government of the United Provinces gave to the appellant Encumbered Estates bonds of the face value of Rs. 3,46,300. The amount received in the year 1946 was appropriated by the appellant towards the principal due. The appellant split up the amount of the face value of the bonds into two sums of Rupees 2,22,097/9/11 and Rs. 1,24,202/6/1, and credited the first amount in the books of account towards the balance of principal and the second amount to an