Sec 41(1)

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vibha surana (Querist)
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26 March 2014 Bad recovery by successor is not considered as an income under the head PGBP p.k kaimal case. But sec 41(1) clause b clearly states that any trading loss incurred by the first person and recovered by the successor shall be considered as his income. Why then bad debt recovery not considered as income for the successor?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 March 2014 The intention of the legislature contained in section 41(4) is the identity of the predecessor and successor should be one and the same.
In the cited case, the predecessor was a partnership firm (M/s. Thirumani Pictures) whereas the successor is Mr P.K.Kaimal, the then partner of the dissolved firm.
So Madras high court distinguished the case with section 41(4).

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