LEACH, C.J. - The petitioner carries on a money-leading business. In 1925 he entered into a partner with one Gurram Sreeramulu to carry on a business in tobacco leaves. The petitioner was the financing partner and Gurram Sreeramulu the working partner. The partnership continued until the 19th January 1929. Losses had been incurred and it was decided that there should be a dissolution. Under the terms of the dissolution Gurram Sreeramulu agreed to pay to the petitioner a sum of Rs. 42,200 being the amount of money which the petitioner had sunk in the business. This is made quite scare from the following recital in the deed of mortgage which Gurram Sreeramulu executed in favour of the petitioner to secure the sum of Rs. 42,200.
'We have been carrying on joint business in tobacco from 1925 till now. the business die not result in any profit but only and on account of this reason you have given up the joint business with me and as a result there of I now owe you Rs. 42,200-14-9 with interest at 9-12-0 towards the capital invested by for the joint or give adequate security for it I herewith.................... Gurram Sreeramulu had not discharged his debt to the petitioner and on the 8th February 1936 the mortgaged properties were conveyed to the petitioner at a valuation of Rs. 20,000 leaving a sum of Rs. 21,817 due by the mortgage. The petitioner had entered in the books of the his money-lending business the sum of Rs. 42,200-14-9 as being a debt due by the mortgagor. For the account year 1935-36 the petitioner sought to treat this sum of Rs. of 21,817 as a bad dent and deducted in from the profits of his money lending business. The Income-tax authorities have treated this sum as being a capital loss and have refused to allow the deduction. The petitioner ask the Court to direct the Commissioner of Income-tax to state a case on the point as involving a questions of law.
It is quite clear that no questions of law arises. The sum of Rs. 21,817 represents a loss of capital sustained by the petitioner in the tobacco leaves business. In has got nothing to do with his money-lending business and the fact that he entered it in the books of his money lending business does not alter its character. The petition must be dismissed with costs, Rs. 150.