POONJABHAI VARMALIDAS vs COMMISSIONER OF INCOME TAX, AHMEDABAD

The Supreme Court ruled that amounts written off as bad debts under Section 10(2)(xi) of the Income Tax Act, 1922, and subsequently recovered, cannot be taxed under Section 41(4) of the Income Tax Act, 1961, if the business was discontinued prior to recovery. The Court held that the provisions of the two Acts are not inconsistent, and Section 24 of the General Clauses Act, 1897, applies, deeming orders made under the repealed provisions as made under the re-enacted provisions. The appeals were dismissed, affirming the Tribunal's decision that the amounts were not taxable due to the discontinuation of the business.