Judgement

Appeal (No. 71 of 1930) from a judgment of the Court of the Judicial Commissioner (December 30, 1928) upon a reference under s. 66, sub-s. 2, of the Indian Income-tax Act, 1922.

The first only of the two questions referred was material to the present appeal, and its terms appear from the judgment of the Judicial Committee. Shortly stated, the question was whether in computing the profits of a business for the purposes of the above Act the assessee has the option of declaring a debt to be a bad debt in the particular year of assessment.

The Court of the Judicial Commissioner, in a judgment reported at 25 Nag. L. R. 35r held that an assessee has the right to decide whether a debt is bad and when it became bad, and that the income-tax authorities could not override his decision.

Law. Rep. 59 Ind. App. 290 ( 1931- 1932) Commissioner of Income-Tax V. Sir S. M. Chitnavis

95

1932. April 5. Dunne K.C. and R. P. Hills for the appellant. The income taxable under the heads mentioned in s. 6 of the Act, which includes business, has by s. 3 to be in respect of the gains in the previous year. Whether a particular debt became a bad debt in the year of assessment is a question of fact to