Case: Commissioner of Income Tax, Bihar &amp; Orissa Vs. Lakshmi Kant Jha and Ors

2. The statement of the case relates to the assessment yearFor this assessment year, the assessee changed his previous year into the financial year, and consequently, the previous year for the present assessment year covered a period of 18 months ending on March 31, 1957. The assessment has been made in the status ofThe assessee succeeded to the impartible estate of the Darbhanga Rai after the death of his father, Sir Maharajadhiraja Rameshwar Singh, on 3rd July, 1929. During his lifetime Sir Maharajadhiraja Rameshwar Singh carried on extensive moneyFor the assessment yearthe question arose whether the assessee succeeded to thebusiness of his father within the meaning of section 26(2) of theAct, as it then stood. The assessee contended that he did not succeed to the business and the revenue held to the contrary. The matter was agitated right up to the Privy Council in the case reported as Maharajadhiraj of Darbhanga v. Commissioner ofTheir Lordships of the Privy Council held that the assessee succeeded to thebusiness which had been carried on by his father in his lifetime5. By a registered deed dated August 4, 1921, the assessees father Maharajadhiraja Sir Rameshwar Singh (hereinafter referred to as the Maharajadhiraja) entered into an agreement with one Kunwar Ganesh Singh (hereinafter referred to as the debtor) to open a firm or  guddee under the name of  Sadhashiva Vishwanath  at Calcutta, to do ready and forward transactions in gunnies, hessians, linseed, jute, etc., and also for dealings in stocks and shares. In this agreement, the Maharajadhiraja was styled as the principal and the debtor as the agent6. The business of  Sadhasiva Vishwanath  was apparently started as a partnership business, in which the debtor was to be the working partner entitled to a 3 as. share. The Maharajadhiraja supplied all the funds and the accounts of the Maharajadhiraja showed advances aggregating to Rs. 32, 00, 000 as underRsAugust 31, 1921 To Kunwar Ganesh Singh forGuddee for ready andin various goods,goods and dealings in shares 2, 50,17, 1921 To Kunwar Ganesh Singh forshares 1, 50,For starting a Guddee styled2, 00, 000" To Kunwar Ganesh Singh forother business 4, 50,ay 30, 1922 By transfer from various banks 10, 50,27, 1922 For Howrah jute share 2, 00, 000November 3, 1922 Kunwar for jute shares 4, 00, 000November 30, 1922 To Kunwar by transfer from bank 5, 00, 00032, 00,The debtor did nut act up to the agreement and special efforts were made in 1923 to collect asmuch as possiblse from him. Between 1924 and 1925 several agreements were entered into, and later on, the Maharajadhiraja was recognised to be the sole owner of the business of Sadhashiva Vishwanath8. On April 30, 1925, the debtor executed a registered document admitting his indebtedness to the Maharajadhiraja to the extent of Rs. 30, 09, 571, and in part satisfaction thereof, transferred to the Maharajadhiraja various assets valued at Rs. 20, 74, 973. The debtor had also earlier executed two pronotes for Rs. 25, 000 each. In pursuance of the registered deed dated April 30, 1925, the debtor executed a promissory note for the balance of Rs. 16, 84,which was to carry interest at the rate of 9% per annum. The sum of Rs. 16, 84,itself included interest of Rs. 6, 09, 571 due from the debtor on the original advance of Rs. 32, 00, 000 while the balance represented the outstanding amount out of the original advances aggregating to Rs. 32, 00, 0009. In the year 1925, the assessees father brought a suit in the Calcutta High Court against the debtor for Rs. 16, 84, 596. A decree was obtained on March 14, 1927, for Rs. 17, 78, 476 inclusive of further accrued interest of Rs. 93, 835. A part of the debt was realised and a sum of Rs. 16, 64, 596 remained unrealised as due from the debtor. The assessee wrote off the sum of Rs. 16, 64, 596 in the accounting year and claimed the same as a bad debt arising in his

Reasoning: Strangely enough, even af ter coming to that conclusion, the High Court certified this case to be a fit case for appeal to this court, under section 66A(2) of theAct, 1922. The High Court did not give any reasons in support of the certificate granted by it. In the ordinary course we would have revoked that certificate and sent back the case to the High Court for giving reasons in support of the certificate. But as we see no merit in this appeal no useful purpose will be served in prolonging this litigation. Findings arrived at by the Tribunal are findings of fact. Those findings are based on evidence. Hence, neither the High Court could have interfered with those findings, nor can we interfere with the same