RAMANUJAM J.

The above two tax cases filed by the same assessees relate to the assessment years 1962-63 and 1963-64 respectively, and as there are common questions involved, they are dealt with together In respect of the assessment year 1962-63 the assessees had claimed deduction of a sum of Rs. 2, 375 on the ground that it represented bad debts and that it is an allowable expenditure under section 5(e) of the Madras Agricultural Income-tax Act, 1955. But, that claim has been disallowed by the assessing authority, the appellate authority and the Tribunal. The assessees contend before us that the said sum of Rs. 2, 375 represents advances made to the labourers to be adjusted later as against their wages, and as the labourers did not turn up for work as expected nor returned the amount advanced the amounts have become bad debts. According to the assessees such amounts which have been expended for the purpose of the plantation have to be allowed as a deduction under section 5(e) of the Act. The learned counsel refers to the decision in Commissioner of Income-tax v. Mysore Sugar Co. Ltd., where the Supreme Court held that advances made by a sugar mill to the producers of sugarcane to be adjusted towards sales price of the sugarcane to be supplied by them later, which have become irrecoverable, are allowable deductions as bad debts under section 10(2)(xv) of the Indian Income-tax Act, 1922. In this case we find that the assessees have not established the truth of the advances alleged to have been made and the factum of its having become irrecoverable. As a matter of fact the assessing authority has specifically given the reason for disallowing the said sum as bad debt as details of names of persons not furnished ; rejected as the claim could not be verified ". That shows that the rejection of the claim was for the reason that the assessees have not proved the genuineness of the expenditure said to have been made and not that it is not allowable deduction. It is not in dispute that the assessees have not established the truth of the expenditure by producing the necessary details as to the persons to whom the amounts have been advanced and as to the steps taken to recover them, either before the Appellate Assistant Commissioner or before the Tribunal. In the circumstances of this case, it is not necessary for us to go into the legal contention put forward by the assessees that the advances made to workers towards their wages which have become irrecoverable are allowable deductions under section 5(e), as we hold that the assessees had not established the truth of the expenditure and the factum of those amounts having become irrecoverable from the workers to whom the amounts are said to have been advanced. We have to, therefore, uphold the view taken by the authorities below on this questionThere is a common question that arises in respect of both the years. The assessee have cut shade trees from their plantation which have become useless and realised a sum of Rs. 13, 880 in the first year and Rs. 20, 342 in the second year by way of sale of the trees so cut. The assessees included these amounts in their return as revenue receipt and the assessment was made on that basis. The assessees did not question the assessment on the said two sums before the Appellate Assistant Commissioner though they filed appeals in respect of other items. After the disposal of the appeals by the Appellate Assistant Commissioner they also filed appeals before the Tribunal but those appeals also did not involve the question of the assessability or otherwise of the said two sums representing the sale proceeds of the shade trees. While the appeals were pending before the Tribunal as regards other items the Supreme Court rendered the decision in State of Kerala v. Karimtharuvi Tea Estate Ltd., holding that the sale proceeds of the shade trees which have become useless were capital receipts and not revenue receipts. As soon as the assessees became aware