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I.T ANo.3290/L.B of 1984-85, decided on 12th May, 1987.
---Ss. 22, 30 & First Sched. Part. I, Para C and Part II. Pare A(2)(e)--.Assessee, a public limited company deriving income from various sources such as Managing Agency Commission. Office Allowance interest Commission on guarantees and dividends- -Taxability.
Assessee was a private Limited company deriving income from various sources such as managing Agency Commission, Office Allowance, Interest, commission on guarantees and dividends. Assessee also claimed a brought forward loss of the earlier assessment year to be adjusted in the year under assessment--The question in the case was that the rate of tax applied by the I.T.O. was incorrect.
In the Income-tax proceedings, the first stage is to assess the income. It is at this stage that it has to be determined as to what is the source of income of the assessee and under which head of income, the income earned by the assessee falls. It is important because under each head of income various allowances and deductions are allowable by the law. Then the assessing officer has to work out the net income from each head of income after allowing expense under respective heads. The sum total of the net income from all the heads of income would be the total income. Taxability stage come after the total income is determined by the assessing officer.
The assessee had various sources of income, which fell under different heads of income. For the purpose of application of rate of taxes, the heads of income are immaterial unless the schedule specifically provides for it. The heads of income are material of relevant in arriving at the total Income after allowing various deduction and allowances under the respective heads.
Under the Schedule the total income has been divided into various categories on different considerations. For instance, under Part I of the First Schedule the different rates of taxes have been given for the total income depending on the quantum of income of the assessee. For purposes of tax, various slabs of income have keen fixed according to which higher the income; higher is the rate of tax. While applying these rates of taxes under Para. A of Part I of the First Schedule, the assessing officer is not required to look into the various sources of income from which the income has been derived. He has only to look at the total income, which he has already determined and then to apply different rates depending on the slabs under which the assessee falls. Similarly, certain other concessional rates have also been given. For instance, where a total income of an assessee upto a certain limit is chargeable under the head salary and such income being more than 50% of his total income, certain concessional rate has been applied upto a certain limit, without going into the question as to under which head of income, the income, other than salary, has been determined.
Under Paragraph C of Part I of the Schedule which prescribes the rate of income-tax on the income of the company, it is specifically required that the dividend income and income from bonus or bonus shares has to be excluded from the total income of the company. There is no such qualification, that such dividend income must have been assessed under section 30. Obviously so because the assessability have stage already over. This stage is relevant only for various deductions allowable under various needs of income. When the total income has been arrived at by the I. T .O. from this total income from whatever sources, the dividend income has to be excluded under Paragraph C (supra). Therefore, income--tax rate under paragraph C cannot be applied on income from dividend as under that paragraph it has been specifically excluded from the total income. There is no other provision under which any rate of income-tax is prescribed for a dividend income of a company. Therefore, no tax can be charged on a dividend income derived by a company. It may be noted here that where the legislature wanted that the income-tax on full rate is to be charged it has so mentioned.
The income should be categorised both for computation of total income as well as for charge of tax. Thus, it is possible that the income might be computed under ore head and charged under another. Mere fact that the assessee wrongly or rightly had declared a particular income as business income, which was accepted by the department as such, cannot change the nature of income otherwise categorised by law. The dividend income has been specifically categorised under subsection (2) of section 30 as income from other sources. Therefore, this statutory lable of the income could not be taken away by either the act of the assessee or that of the department because certain consequences flow from such treatment, which can be beneficial to the assessee or to the department. There is no denying the fact that the assessee had earned dividend income and, therefore, has to be treated as such for applying rate of tax given in the Schedule.
The concessional rate is available under the Schedule to the dividend income. In the Schedule the only requisition is that it should be a dividend income. Under Part I of the First Schedule various rates of taxes have been given for different categories of cases. In Para .A of Part I rates of income have been given where slabes of income have been given on which various rates of taxes are to be applied. Then in Para B a fiat rate of 30% is applied on the total income of a local authority.
Rate of 30% of income-tax is to be applied on the total income "excluding such part of the total income as consists of any dividends or bonus or bonus shares to which sub-paragraph (2) or (3) of Paragraph A of Part 11 applies". The dividend income has been specifically excluded from the total income with only one qualification that if such an income is of the kind to which sub-paragraph (2) or (3) of Paragraph A of Part 11 applies. The only condition given therein is that such dividend income must be from a Pakistani Company
No income-tax is chargeable on dividend income of a company. Now coming to Part 11 of the First Schedule dealing with the rates of super-tax in Paragraph A, again the dividend income has been excluded from the total income of a company. According to this paragraph, super-tax at the rate of .35 in the case of a banking company and 25 in the case of a company other than a banking company, has to be applied on the total income "excluding such, part of the total income as consists of dividends". It is sub-paragraph (2) of Paragraph A of the First Schedule, which provides tile rate of super-tax to be applied on income from dividend of a Pakistani Company. Admittedly the assessee has derived dividend income, which is included in the total income. Therefore irrespective as to what treatment has been given to this income by the assessing officer or even by the assessee for the purpose of arriving at the total income, it continues to be a dividend income and under no principle of law or accountancy will it cease to be a dividend income. Section 15 'of the Income-tax Ordinance which categorises the heads of income is only for purposes of computation and charge or total income. Sections 9 and 10 of the Ordinance, under which a charge has been created, provides that tax-has to be charged at the rates given in the Schedule. On dividend income, no tax rate has been given and for super-tax only a concessional rate of tax -has been provided. Therefore, by no amount of logic, any rate of tax could be applied on dividend income other than the one provided by the Schedule itself.
The argument that the assessee had claimed dividend income as business income and the assessing officer had accepted it and the assessee had taken benefit out of it by adjusting losses, this had no relevancy whatsoever for applying rates of taxes under the Schedule. This had a relevancy only in regard to the computation and charge of the total income and not to the application of rates given in the Schedule.
If the department feels that it had committed a mistake in treating the dividend income as business income and has wrongly adjusted loss, it is for the concerned authorities, who may or may not consider to rectify the mistake if they think that it is really a mistake. But even if this is a mistake it has no bearing oft the application of rates on dividend income which income is a dividend income and continues to be so forming part of the total income. It is for these reasons that Para (C) of First Schedule lays down that dividend income has to be excluded from the total income which presupposes that it is already a part of the total income.
Commissioner of Income-tax, Bombay v. Chugandas and Co. (1964:) 54 1 T R 17; Commissioner of Income-tax v. American Life Insurance Company (1967) 15 Tax 268; (1964) 10 Tax 95 and Phoenix Auurance Company's case (1937) 5 I T R 597 ref.
Sohail Hassan Advocate, Rustamjee, C.A. and M. Iqbal Chughtai. I.T.P: for Appellant.
Ilyas Khan and Ch. M. Ishaque, Legal Advisors, Nazeer Ahmed Saleemi, D.R.P. and Fakharul Islam I.A.C. for Respondent.
Date of hearing: 8th March, 1987.
.--This is an appeal filed by a Public Limited Company deriving income from various sources such as Managing Agency Commission, Office Allowance, Interest, Commission on guarantees and dividends.
2. Brief facts of the case under which this appeal has arisen are that the assessee; as per audited accounts, declared its profits from the following sources:-
| Managing Agency Commission and Office Allowance. | Rs. 50,87,232 |
| Dividends | Rs.20,60,12,700 |
| Interest & charges on loans | Rs. 7,10,59,589 |
| Commission on guarantees | Rs. 34,59,074 |
| Total | Rs. 28, 56,18, 595 |
| Interest on Bank deposits | Rs.01,62,65,597 |
| Miscellaneous Income | Rs. 42.48'7 |
| Profit on deletion of fixed assets. | Rs. 2,78,286 |
| Total Gross Profit: | Rs.30,22,05.325 |
| Less: Expenses & other charges | Rs.16,30,22,709 |
| | |
The assessee also claimed a brought forward loss of the earlier assessment years to be adjusted in the year under consideration to the tune of Rs.3,90,30,289. After adjusting the loss, the income was assessed at Rs.10,72,44,625. The main dispute in this case which has: been agitated by the learned counsel for the assessee was that the rate of tax applied by the learned I.T.O. was incorrect. The I.T.O. has applied Income-tax and Super-tax at the aggregate rate of 50% while the assessee's case is that the dividend income has to be excluded from the assessee's total income on which only super--tax @ 5% is to be applied as provided under Para A(2)(a) of Part II of the First Schedule of the Income-tax Ordinance, 1979. The learned C.1-T. (Appeals) while discussing the assessee's contention has concisely pinned down the issues as under:-
(a) Whether dividend income was assessable, under section 22 or section 30;
(b) If assessable as business income under section 22, whether benefit of concessional rate of tax applicable to dividend income under paragraph A(2)(a) of Part 11 of the First Schedule was available;
(c) If assessable under section; 30 as dividend income, whether loses of earlier years could be set off there against.
2. Before the learned CIT (Appeals) it was argued that notwithstanding the fact that the assessee had derived income from dividend which is part of the business of the assessee to make investment and to derive income as dividend, the fact remains that the dividend income still carried the character of dividend income :or the purpose of applying rates of taxes under the Schedule. The department's case however, before the learned C.I.T. (Appeals) was that the assessee cannot take double advantage while first claiming the dividend income as business income and thus, adjusting brought forward losses which could not be adjusted if the dividend income is not treated as business income. Secondly, when the question of applying rate arose the assessee reverted back to the original position and wanted the dividend income to be treated as such. While deriding the above three issues, the learned CIT (Appeals) came to the conclusion that section 30 is not mandatory in nature and there can be cases where an income from dividend can be assessed either under section 22 or under section 30. Since the assessee carried on composite business and the dividend income was also declared by the assessee as part of the business income, therefore, the assessing officer accepted the dividend income as declared by the assessee and thus the I.T.O. has rightly assessed the dividend income of the assessee as part of the business income under section 22 of the Ordinance. In regard to the second issue the learned CIT (Appeals) came to the conclusion that the concessional rate of the super-tax was not available to the assessee as dividend income has been assessed as business income. I may here reproduce the finding of the learned CIT (Appeals) in his own words:
"In my opinion, the benefit of concessional rate of super tax is available to only such dividend income as is assessed under section 30 of the Ordinance. Dividend income forming a part of business income and assessable under section 22 loses its separate entity and income from business as a whole is liable to taxation at the normal rates of income-tax and super tax."
We have not been able to appreciate the reasoning and logic of the learned C.I.T. The concessional rate is available under the Schedule to the dividend income. The qualification attached by the learned CIT (Appeals) for the application of concessional rate of super tax finds no mention in the first Schedule. In the Schedule the only' requisition is that it should be a dividend income. Under Part I of the First Schedule various rates of taxes have been given for different categories of cases. In para A of Part I rates of income have been given where slabs of income have been given on which various rates of taxes are to be applied. Then in Para B a flat rate of 30% is applied on the total income of a local authority. Then comes Para C of Part I which is reproduced below.
"C. in the case of every company 30 percent of such income including a foreign association declared to be a company by the Central Board of Revenue under clause (161 of section 2 on the total income excluding such part of the total income a consists of any dividends or bonus or bonus shares to which sub-paragraph (2) or sub-paragraph (3) of Paragraph A of Part 11 applies and income to which Chapter V applies."
From the perusal of the above paragraph C, it is evident that rate of 30 of Income-tax is to be applied on the total income "excluding such part of the total income as consists of any dividends or bonus or bonus shares to which sub-paragraph (2) or (3) of Paragraph A of Part II applies. The dividend income has been specifically excluded from the total income with only one qualification that if such an income is of the kind to which sub-paragraph (2) or (3) of Paragraph A of Part II applies. Now looking at sub-paragraph (2) of Paragraph A of Part II we find that the only condition given therein is that such dividend income must be from a Pakistani Company. The aforesaid sub-paragraph (2) is reproduced below:-
"to which paragraph C of Part I applies, on the amount representing income from dividends from a Pakistani Company."
3. Now we have the following admitted facts:-
(1) That the assessee is a Pakistani Company;
(2) That the dividend income is from a Pakistani Company;
(3) There is a dividend income.
The above three admitted facts are the only requirements to apply a concessional rate of super-tax under sub-paragraph (2) of Paragraph A of Part If of the Schedule. The learned CIT (A) while discussing this issue has confused the assessability of income and payability of tax. In the Income-tax proceedings, the first stage is to assess the income. It is at this stage that it has to be determined as to what is the source of income of the assessee and under which head of income, the income earned by the assessee falls. It is important because under each head of income various allowances and deductions are allowable by the law. Then the assessing officer has to work out the net income from each head of income after allowing expenses under respective heads. The sum total of the net income from all the heads of income would be the total income. Taxability stage comes after the total income is determined by the assessing officer. We have seen in the present case that the assessee has various sources of income, which fell under different heads of income. For the purposes of application of rate of taxes, the heads of income are immaterial unless the schedule specifically provides for it. The heads of income are material or relevant in arriving at the total income after allowing various deductions and allowances under the respective heads.
4. Now under the Schedule the total income has been divided into various categories on different considerations. For instance, under Part I of the First Schedule the different rate of taxes have been given for the total income depending on the quantum of income of the assessee. For purposes of tax, various slabs of income have been fixed according to which higher the income: higher is the rate of tax. While applying these rates of taxes under Part A of Part I of the First Schedule, the assessing officer is not required to look into the various sources of income from which the income has been derived. He has only to look at the total income, which he has already determined and then to apply different rates depending on the slabs under which the assessee falls. Similarly, certain other concessional rates have also been given. For instance, where a total income of an assessee upto a certain limit is chargeable under the head salary and such income being more than 50% of his total income, certain concessional rate has been applied up to a certain limit, without going into the question as to under which head of income, the income other than salary, has been determined.
5. Now under Paragraph C of Part I of the Schedule which prescribes the rate of income-tax on the income of the company, it specifically requires that the dividend income and income from bonus or bonus shares has to be excluded from the total income of the company. There is no such qualification, as has been mentioned by the C.I.T. (Appeals) that such dividend income must have been assessed under section 30. Obviously so because the assessability stage is already over. This stage is relevant only for various deductions allowable under various heads of income. The total income has been arrived at by the learned I.T.O. and from this total income, from whatever, sources, the dividend income has to be excluded under Paragraph C (supra). Therefore, income-tax rate under paragraph C cannot be applied on income from dividend as under that paragraph it has been specifically excluded from the total income. There is no other provision under which any rate of income-tax is prescribed for a dividend income of a company. Therefore, no tax can be charged on a dividend income derived by a company. It may be noted here that where the legislature wanted the income-tax on full rate is to be charged it has so mentioned.
6. The learned counsel for the assessee has relied upon the number of decisions out of which few need mentioning to support the view that we are taking. The first case is that of Commissioner of Income-tax Bombay v. Chugandas and Co. decided by the. Supreme Court of India reported as (1964)-54-ITR-17. At page 24 of the report the Supreme Court observed:
"The heads described in section 6 and further elaborated for the purpose of computation of income in sections 7 to 10 and 12, 12-A, 12-AA and 12-B are intended merely to indicate the classes of income; the heads do not exhaustively delimit sources from which income arises. This is made clear in the judgment of this Court in the United Commercial Bank Ltd's case, that business income is broken up under different heads only for the purpose of computation of the total income by that break up the income does not cease to be the income of the business, the different heads of income being only the classification prescribed by the Indian Income-tax Act for computation of income."
The contention of the learned Legal Advisor however, was that this is a case of Indian jurisdiction and under the Repealed Income-tax Act and is not applicable because, section 6 of the Act provided for the computation of income while under section 15 of the I.T. Ordinance classification is for the purpose of charge of tax and the computation of total income. This contention is devoid of any force because the breaking up of the income into various categories is for the purpose of computation and charge to tax. What the department has done in this case is that for the purposes of computations of income the dividend income has been categorised as business income and also wanted to charge tax as business income. On the contrary what the law requires is that the income should be categorised both for computation of total income as well as for charge of tax. Thus, it is possible that the income might be computed under one head and charged under another. Mere fact that the assessee wrongly or rightly had declared a particular income as business income, which was accepted by the department as such, cannot change the nature of income otherwise categorised by law. The dividend income has been specifically categorised under subsection (2) 4 of section 30 as income from other sources. Therefore, this statutory table of the income could not be taken away by either the act of the assessee or that of the department because certain consequences flow from such treatment, which can be beneficial to the assessee or to the department. There is no denying the fact that the assessee had earned dividend income and therefore has to be treated as such for applying rate of tax given in the Schedule.
7. Another case, which needs mentioning is that of Commissioner of Income-tax v. American Life Insurance Company, decided by the Karachi Nigh Court and reported as (1967)-15-Tax-268 at page 272 of the report on behalf of the department the same argument was advanced as in the present case. 'That case was of an Insurance Company for which specific provision was made under section 10(7) of the Repealed Income-tax Act that such income would be computed as provided in the Schedule. Dealing with this contention of the Departmental Representative, the High Court observed:-
"Mr. Nusrat's contention is that since the method of computation of income of Life Insurance Company is on the basis of surplus according to actual valuation which comprises all the various sources of income, and the entire income has been offered for tax under Section 10 of the Income-tax, Act, it cannot be differentiated between the two heads of income i.e. business and dividend and charged at different rates."
Dealing with this contention the High Court observed:
"The learned counsel however had to concede that section 10 (7) only deals with the computation of the income of an Insurance Company and is not a. charging section. Therefore in order to charge an Insurance Company to income-tax it would be necessary, as in the case of other persons to rely on the other provisions in the Income-tax Act which are called charging sections. In section 3 of the Income-tax Act it is provided that income-tax shall be charged at any rate or rates fixed for the year by the annual Finance Act in respect of the total income of the previous year of every person, which includes the company. Section 4 defines the amount of total income the ambit of taxation varies with the factor of residence in the previous year etc. Under section 6 of the Income-tax Act there are six heads of income, profits and gains chargeable to Income-tax but in view of Section 10 (7) these have no application to the cases of Insurance Companies. In such cases the Insurance Company instead of submitting its returns under different heads had to submit it as one unit of income on the basis of national or artificial income as provided in the Schedule to the Act. In order however to charge the Insurance Companies to Income-tax, as in other cases, resort has to be made to the Finance Act applicable to the relevant assessment year. In the present case, Finance Ordinance, 1960 is applicable. Now under section 10 of the said Ordinance income-tax was to be charged at the rates specified in Para l of the Third Schedule. There is no other method of charging the Income-tax. So far as the super-tax for purposes of Section 55 of the Income-tax 1ct, 1922 is concerned, it was to be charged at the rate specified in Part 11 of the said Schedule. Thus it was necessary for the assessing authorities to terms of Part I and Part II of the Third Schedule to find out tie rates at which the Income-tax and super-tax was to be charged on the assessee's income.
It may be noted here that Section 10 (7) of the Repealed Act provided that business of Insurance Companies was to be computed under First Schedule of the Repealed Income-Tax Act which, inter alia, provided that such an income was chargeable under the head income from business or profession irrespective of the source from which the same was derived. In the present case dividend income, rightly or wrongly, has been assessed by the assessing officer as 'business income' while in the cited case, the Insurance Companies income under law was assessed as income from business from whatever source derived. It is in these circumstances that the High Court held that rate of tax applicable on dividend income would be as provided it, the Schedule and the dividend income continued to carry the table of dividend income. Consequently, in the concluding paragraph of the judgment the High Court observed:
"In these circumstances, we fully agree with the observations of the learned Tribunal that although by artificial method the computation of the income in cases of life insurance business is to be made in a particular manner yet for charging the tax one should refer to the different provisions of the Schedule to Section 10 of the Finance Ordinance, 1960: and since this Ordinance clearly demarcates different rates applicable to different kinds of income, the rates applicable to the dividend as such has got to be adopted in conformity with these provisions."
8 This decision of the High Court has completely clinched the issue. Both the officers below have brushed aside this decision relied upon by the assessee, on the ground that this is a case of Insurance Company and therefore was not relevant to the present assessee, although the principle laid down by the High Court is applicable in all cases.
9 The last case, which needs mentioning, is reported as (1964)-10- f ax.95. This is a decision made by the Full Bench of the Income-Tax appellate Tribunal. In that case a public limited company carried on life and general insurance business and also derived income from property and dividend. The assessee claimed exemption of income from property and concessional rate of tax on dividend income. In that case as well the department took the view that the income from interest, on securities and dividends etc, merged with the profits of the insurance business and its identity was completely lost. It was argued by the department that the profit so merged were not capable of further sub-division at the time of charging the tax, into different heads, categories under section 6 of the Repealed Income-tax .Act. At page 101 of the report it was observed:
"Whatever may be the profits of the insurance business, yet if any portion thereof represents or is composed of income which was from dividends of company having its registered office in Pakistan the levy of Income-Tax thereon is Nil within the meaning of sub-paragraph 1 (a) of Part B Part I of the Fourth Schedule."
Then at page 103 of the same report the Tribunal observed:
"The Department contended that the income, profits and gains were to be computed by Rules 25 and 35 framed under section 59 of the Act (corresponding to the Rules contained in the First Schedule of the Income-tax Act) and that those Rules were a code complete in themselves and once the income, profits and gains were so computed under that code it was not permissible in law to make any additions to or subtraction from that sum except in accordance with the provisions of Rule- 25."
Dealing with this argument, the Tribunal quoted following passage from the judgment of Sir Herold Derbyshire, C.J. with approval:-
"Where the return shows that some of the interest has been derived from securities of the Government of India declared to be tax-free, it is impossible in my view for the Income-tax authorities to ignore the plain provisions of the proviso to Section 8 of the Income-Tax Act which say that no income-tax shall be payable on the interest receivable on any security of the Government of India issued or declared to be income-tax free."
Then the Tribunal relied upon another case of Phoenix Assurance Company (1937)-5-1'TR-797 and observed that the income, profits and gains of a Life Assurance were arrived at in the manner prescribed by Rules 25 and 35. It was open to the company to go behind this notional figure by referring to the actual source of its receipts and claim exemption from tax in respect of interest on tax-free securities, which had been taken into account in arriving at this notional figure.
10. From the above facts it is clear that no income-tax is chargeable on dividend income of a company. Now coming to Part II of the First Schedule dealing with the rates of super-tax, in Paragraph A, again the dividend income has been excluded from the total income of a company. According to this paragraph, super-tax at the rate of 35% in the case of a banking company and 25% in the case of a company other than a banking company, has to be applied on the total income "excluding such part of the total income as consists of dividends" It is sub-paragraph (2) of Paragraph A of the First Schedule which provides the rate of super--tax to be applied on income from dividend of a Pakistani company, Admittedly the assessee has derived dividend income which is included in the total income. Therefore irrespective as to what treatment has been given to this income by the assessing officer or even by the assessee for the purpose of arriving at the total income, it continues to be a dividend income and under no principle of law or accountancy will it cease to be a dividend income. It may be stated here that Section 15 of the Income-tax Ordinance, which categorises the heads of income, is only for purposes of computation and charge of total income. Sections 9 and 10 of the Ordinance, under which a charge has been created, provide that tax has to be charged at the rates given in the Schedule. On dividend income, no tax notice has been given and for super-tax only a concessional rate of tax has been provided. Therefore by no amount of logic, any rate of tax could be applied on dividend income other than the one provided by the Schedule itself.
11. As for the argument that the assessee had claimed dividend income as business income and the assessing officer has accepted it and the assessee has taken benefit out of it by adjusting losses, this has no relevancy whatsoever for applying rates of taxes under the Schedule. This had a relevancy only in regard to the computation and charge of the total income and not to the application of rates given in the Schedule.
12. If the department feels that it had committed a mistake in treating the dividend income as business income and has wrongly adjusted loss, it is for the concerned authorities who may or may not consider to rectify the mistake if they think that it is really a mistake. But even if this is a mistake it has no bearing on the application of rates on dividend income which income is dividend income and continues to be so forming part of the total income. It is for these reasons that Para (C) of first Schedule lays down that dividend income has to be excluded from the total income which prespouses that it is already a part of the total income".
13. The next objection of the assessee is in regard to disallowance of Rs.1,28,94,774 which had been written off by the assessee and was due from a subsidiary company under liquidation. This amount was due from M/s. Pakistan Fertiliser Company Ltd., which was under liquidation and liquidators had been appointed. The assessee had written off this amount in the Profit & Loss Account on the ground that nothing was likely to be realized from that company. The I.T.0 disallowed the claim on the ground that it had been pre-maturely written off. The learned CIT (A) rejected the assessee's plea on the ground that the claim was made by the assessee on mere assumption. As before the learned CIT (A) the assessee pleaded before us that even when tile final liabilities are settled, even then the assessee does not expect anything to be recovered because the expected realizations could hardly even meet the liabilities which, were fully secured and had a first charge on the assets of that company.
14. We have given a careful consideration on this contention of the assessee, we feel that the assessee has a force in this contention. If after meeting the secured liabilities having first charge on the assets of the debtor company, nothing is likely to be left for the assessee. It is only futile to wait for the final settlement. In such a case it is needless to wait for the finalization of the liquidation proceedings. However, this fact needs verification. On this issue we set aside the orders of the officers below with the direction that this contention of the assessee be re-examined with reference to the assets of the debtor company. If the assessee's contention is found correct then the amount written off by the assessee should be allowed.
15. In the result the appeal is accepted to the extent indicated above.
M. B.A/407/T. Appeal accepted.
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