CHAGLA, C.J. :- The question that arises on this reference is whether a certain amount is an allowable deduction under S. 10(2)(xv), Income-tax Act or in any event it is a business loss which can be deducted for the purpose of ascertaining the true profits of the assessee.

2. The assessee is a commission agent and lie, along with one Kisonlal borrowed a sum of Rs. 1,00,000/- from a Bank on joint and several liability. Rupees 50,000/- out of this sum were taken, by the assessee for his business and Rs. 50,000/- were taken by Kisonlal. Kisonlal failed to meet his obligation and was adjudicated insolvent. Therefore under the joint and several liability the assessee had to pay to the Bank the whole amount of Rs. 1,00,000/-.

In the insolvency of Kisonlal the assessee received a sum of Rs. 18,805/- and he therefore claimed the balance of Rs. 31,740/- for the assessment year 1951-52, after taking into consideration, certain interest and insolvency expenses and the Tribunal held that this was a permissible deduction under S. 10(2)(xv) or in any event it was a business loss which was allowable as a deduction in computing the profits of the assessees business.

3. Certain specific findi