Judgment B.N.Agrawal, J. 1. In these references under Sec.256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the following questions have been referred to us for the opinion of this court: " (1) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in holding that the claim of loss of Rs. 9,41,780 could not be allowed as loss in money-lending business? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the loss claimed could not be allowed as the income from Zamindari had mostly been excluded from the ambit of taxation ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the loss, if any, could not be claimed as loss in the assessment year 1962-63 ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the debt of Rs. 41,000 became bad during the period relevant to the assessment year 1962-63 ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount of Rs. 72,000 received as compensation for the two Simla properties was not liable to tax in the assessment year 1962-63?" 2. These references relate to the assessment year 1962-63. In Taxation Case Reference No. 62 of 1977, the reference is at the instance of the assessee in which questions Nos. (1) to (3), referred to above, have been referred, whereas in Taxation Case References Nos. 63 and 64 of 1977, the reference has been made at the instance of the Revenue in which questions Nos. (4) and (5) have been referred. A consolidated statement of the case has been forwarded to us by the Income-tax Appellate Tribunal, Patna Bench, Patna (hereinafter referred to as " the Tribunal "). 3. The relevant facts for answering questions Nos. (1) to (3), i.e., in the assessees reference are that on June 30, 1930, the assessee advanced a sum of Rs. 17,00,000 to one Shri Bhubneshwar Prasad Narain Singh of Madhubani who executed a zarpeshgi lease with regard to a large number of villages with an annual income of about Rs. 2,00,000 in favour of the assessee for 20 years and put the assessee in possession. 17,00,000 to one Shri Bhubneshwar Prasad Narain Singh of Madhubani who executed a zarpeshgi lease with regard to a large number of villages with an annual income of about Rs. 2,00,000 in favour of the assessee for 20 years and put the assessee in possession. Thereafter, on March 15, 1931, the assessee granted a sub-lease for nine years with regard to the very same property except the lands of two villages in favour of one G. P. Danby who agreed to pay a sum of Rs. 1,64,585 as rent thereof, and the sub-lessee was put in possession of the aforesaid property. The sub-lessee continued in possession of the property till 1946 and thereafter the assessee came in possession thereof. On November 14, 1951, the lands in question vested in the State of Bihar under the provisions of the Bihar Land Reforms Act (hereinafter referred to as "the Land Reforms Act"). The assessee filed an application under Sec.14 of the Land Reforms Act before the Claims Officer claiming Rs. 17,00,000 but the Claims Officer by his order dated June 26, 1956, fixed the claim at Rs. 15,50,147 after deducting a sum of Rs. 1,49,853 which was realised by the assessee from the sub-lessee out of Rs. 17,00,000 claimed by the assessee. Against the order of the Claims Officer, the assessee preferred an appeal before a Board constituted under the Land Reforms Act consisting of a learned single judge of this court and the Board by its order dated January 9, 1962, reduced the claim to Rs. 12,19,750 and thereby modified the order of the Claims Officer. Thereafter, the assessee filed a writ application before this court which was decided on November 11, 1965, by a Division Bench of this court. The writ application was allowed, the order of the Board was set aside and that of the Claims Officer was restored, meaning thereby that the claim was fixed at Rs. 15,50,147. In the meantime, by order dated November 28, 1963, the Compensation Officer under the provisions of the Land Reforms Act fixed the compensation of the lands in question at Rs. 6,08,367. Since the claim of the assessee was for Rs. 15,50,147 and the compensation received was only Rs. 6,08,367, the assessee suffered a loss of Rs. 9,41,780, In the accounting year relevant to the assessment year, the assessee claimed before the Income-tax Officer the aforesaid sum of Rs. 6,08,367. Since the claim of the assessee was for Rs. 15,50,147 and the compensation received was only Rs. 6,08,367, the assessee suffered a loss of Rs. 9,41,780, In the accounting year relevant to the assessment year, the assessee claimed before the Income-tax Officer the aforesaid sum of Rs. 9,41,780 as a bad debt incurred by the assessee in a money-lending transaction. 4. The Income-tax Officer rejected the claim on two grounds, firstly, that the income from the zarpeshgi lease was agricultural income and not income from money-lending business as the property in question was an agricultural one. Therefore, he could not claim the aforesaid sum as a bad debt incurred in a money-lending transaction. The Income-tax Officer further came to the conclusion that the loss in question could not have been claimed in this assessment year as the accounting year relevant to the assessment year in question ended on March 31, 1962, and thereafter only compensation has been fixed by the Compensation Officer by his order dated November 28, 1963. On appeal being preferred, the Appellate Assistant Commissioner of Income-tax upheld the rejection and the Tribunal also approved the same. Hence, this reference. 5. The question to be considered for answering this reference is whether payment made to the lessor was premium or the same was a loan. If it is held that the payment was a premium and not a loan, the income being agricultural from the leasehold properties, was not assessable and, therefore, the loss accrued therefrom cannot be claimed under the Act. But if it is held that the payment to the lessor was a loan, the income is from money-lending business and if in the course of which any loss is incurred, the same can be claimed as a bad debt under the provisions of the Act. It has been brought to our notice that in the case of the very same assessee in the assessment year 1958-59, this question was raised before this court in Pandit Lakshmi Kant Jha (Executor to the Estate of Late Maharajadhiraja Sir Kameshwar Singh of Darbhanga V/s. CIT [1980] 124 ITR 470. In that case, one Rani Bhuwaneshwari Kuer of Amawan executed a zarpeshgi lease on January 31, 1936, for a sum of Rs. 47,61,000 in favour of the assessee for 28 years. The assessee remained in possession of the property covered by the zarpeshgi lease. In that case, one Rani Bhuwaneshwari Kuer of Amawan executed a zarpeshgi lease on January 31, 1936, for a sum of Rs. 47,61,000 in favour of the assessee for 28 years. The assessee remained in possession of the property covered by the zarpeshgi lease. In 1952, the property covered by the zarpeshgi lease vested in the State of Bihar under the provisions of the Land Reforms Act. The assessee filed a claim under Sec.14 of the Land Reforms Act before the Claims Officer who fixed the claim at Rs. 32,58,231 as the assessee had realised Rs. 14,47,768 as income from the leasehold. 6. Thereafter, the compensation of the leasehold property was fixed by the Compensation Officer under the Land Reforms Act at Rs. 3,42,996. On the basis of that, the assessee claimed that the amount of Rs. 29,16,000 was a bad debt from money-lending business. This claim of the assessee was disallowed by the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal and thereafter the matter came to this court. In that case, this court held, after interpreting various clauses of the zarpeshgi lease deed and following the decision of the Supreme Court in the case of the assessee himself in Maharajadhiraj Sir Kameshwar Singh V/s. State of Bihar [1959] 37 ITR 388, that the property in question was an agricultural one and the payment made to the lessor was premium for the leasehold property and was neither a loan nor was the leasehold a security for the loan advanced. Since the property in that case was admittedly agricultural, it was held that the income therefrom was agricultural and consequently the loss also cannot be said to be a bad debt in the money-lending transaction and, therefore, the same cannot be claimed under the provisions of the Act. 7. In the case on hand, the terms of the zarpeshgi lease deed are similar to the one in the aforesaid cases. Therefore, the aforesaid cases apply on all fours to this case. Thus, in my view, questions Nos. (1) and (2), referred to above, are concluded by the aforesaid decisions of this court as well as the Supreme Court and the Tribunal was quite correct in holding that the claim of the assessee was rightly rejected by the Income-tax Officer and upheld by the Appellate Assistant Commissioner. In view of the fact that questions Nos. (1) and (2), referred to above, are concluded by the aforesaid decisions of this court as well as the Supreme Court and the Tribunal was quite correct in holding that the claim of the assessee was rightly rejected by the Income-tax Officer and upheld by the Appellate Assistant Commissioner. In view of the fact that questions Nos. (1) and (2) are being answered against the assessee, it is not necessary to answer question No. (3) referred to this court as once it is held that the loss did not accrue on account of money-lending transaction, the same cannot be claimed as a bad debt under the provisions of the Act. Therefore, it is not necessary to decide as to in which assessment year the same could have been claimed. 8. Now, I proceed to decide the departmental references and the necessary facts for deciding question No. (4) are that the assessee obtained a decree for Rs. 41,000 and the decretal dues were to be paid in instalments. The judgment-debtor failed to pay the instalment which was due on June 23, 1949, whereafter, for realisation of the decretal dues, execution was levied, but, in the meanwhile, the estate of the judgment-debtor vested in the State of Bihar under the provisions of the Land Reforms Act, whereafter the execution case became infructuous and the same was dismissed for default in the year 1952. Thereafter, another execution was levied by the assessee in the year 1955 for the attachment of the entire compensation payable to the judgment-debtor but the execution was finally dismissed and the dismissal was affirmed by this court on September 1, 1959. The assessee thereafter took no steps, but he claimed the decretal amount of Rs. 41,000 as a bad debt in the accounting year relevant to the assessment year on the ground that the 12 years period of limitation for filing execution counting the period of limitation from June 23, 1949, was to expire on June 23, 1961, which date fell within the accounting year relevant to this assessment year. The Income-tax Officer held that the aforesaid sum was a bad debt, but did not allow the claim of the assessee on the ground that the debt had become bad long ago and could not have been claimed in the assessment year. The disallowance was affirmed by the Appellate Assistant Commissioner. The Income-tax Officer held that the aforesaid sum was a bad debt, but did not allow the claim of the assessee on the ground that the debt had become bad long ago and could not have been claimed in the assessment year. The disallowance was affirmed by the Appellate Assistant Commissioner. When the matter went to the Tribunal, it allowed the claim of the assessee and held that the assessee was entitled to claim the amount in question as a bad debt in the assessment year as the remedy of the assessee became barred on June 23, 1961, which fell within the accounting year relevant to the assessment year. Hence, these references. The question arises as to when a debt becomes bad and whether it could become bad only when the remedy for realisation thereof becomes barred. The general Rule is that a debt becomes bad when it becomes irrecoverable, i.e., when the remedy for recovery thereof becomes barred, but there may be exceptions to this general rule. One of such exceptions may be that if an assessee obtains a decree for recovery of a loan in the year 1970 and before he could levy execution for realisation of decretal dues in the year 1971, the judgment-debtor dies leaving behind no property out of which the decretal dues could be realised. In this case, the debt becomes bad in the year 1971 itself on the death of the judgment-debtor. The matter can be examined from another angle. If an assessee obtains a decree in the year 1970 and he files an execution case which is dismissed in the year 1980 on the ground that the judgment-debtor is not possessed of any property, in that case, by the dismissal of the execution case of the assessee on the aforesaid ground, it cannot be necessarily said that the debt became bad in the year 1980. If the judgment-debtor acquires property in the year 1981-82, the assessee could file an execution case till the year 1982, i.e., well within the period of 12 years from the date of passing of the decree and realise his decretal dues from the properties acquired by the judgment-debtor either in the year 1981 or 1982 and the debt cannot be said to be a bad one in the year 1980 when the execution of the assessee was dismissed on the ground that the execution was dismissed in view of the fact that the judgment-debtor had no property out of which the decretal dues could have been realised. Thus, it may be stated that a debt may become bad when the remedy for recovery thereof becomes barred. The instances which I have given are only illustrative and not exhaustive. There may be certain other considerations for holding as to when a debt becomes barred. In the case on hand, the execution was finally dismissed by the High Court on September I, 1959, but the assessee thereafter could have levied fresh execution by June 23, 1961. If the judgment-debtor could have acquired the property between September 1, 1959, and before June 23, 1961, it was open to the assessee to levy execution by June 23, 1961, for realisation of the decretal dues and the debt could not have become bad prior to June 23, 1961. There is no evidence in the case that the judgment-debtor did not acquire any property between September 1, 1959, and before June 23, 1961. In this view of the matter, the debt became bad only on June 23, 1961, when the remedy for realisation of the debt became barred. I am fortified in my view by the decision of the Privy Council in CIT V/s. S.M. Chitnavis, AIR 1932 PC 178 and a Bench decision of this court in Deoniti Prasad Singh V/s. CIT, AIR 1953 Pat 360 . Learned counsel for the Revenue contended that the Income-tax Officer during the course of assessment found that from an entry in the books of account of the assessee, it appears that the assessee had shown the sum of Rs. 41,000 as a bad debt long ago in the accounting year relevant to the assessment year. Learned counsel for the Revenue contended that the Income-tax Officer during the course of assessment found that from an entry in the books of account of the assessee, it appears that the assessee had shown the sum of Rs. 41,000 as a bad debt long ago in the accounting year relevant to the assessment year. In the case of S.M. Chitnavis, AIR 1932 PC 178, it has been held that the showing by the assessee as a bad debt in a particular year cannot make the debt a bad one in that accounting year but the debt becomes bad only when it becomes such in the eye of law. Thus, the Tribunal was justified in holding that the debt became bad in the accounting year relevant to the assessment year and no illegality has been committed by it in deciding this question. 9. Question No. (5) quoted earlier relates to taxability during the assessment year 1962-63. The substance of the question is whether it was taxable in the said assessment year. The Tribunal held that the said sum was not taxable at all. Upon that finding, the question whether it was taxable for the assessment year 1962-63 was redundant. The question of the year of taxability is relevant only when the income is liable to tax. The Tribunal having held that the aforesaid sums of Rs. 72,000 were not liable to tax, the question of the year of taxability did not arise. The Tribunal has not referred to us whether the said sum was taxable or not. Had that been the question, the question of the year of assessment would have to be considered along with the liability to tax. But, upon the findings, the question of the year of taxability need not be answered. I, therefore, refuse to answer question No. (5). 10. Thus, questions Nos. (1) and (2) are answered in favour of the Revenue and against the assessee and question No. (4) is answered in favour of the assessee and against the Revenue. So far as questions Nos. (3) and (5) are concerned, this court refuses to answer the same. These references are thus disposed of with costs. In Taxation Case No. 62 of 1977, hearing fee is assessed at Rs. 250 payable by the assessee. In each of the Taxation Cases Nos. 63 and 64 of 1977, hearing fee is assessed at Rs. (3) and (5) are concerned, this court refuses to answer the same. These references are thus disposed of with costs. In Taxation Case No. 62 of 1977, hearing fee is assessed at Rs. 250 payable by the assessee. In each of the Taxation Cases Nos. 63 and 64 of 1977, hearing fee is assessed at Rs. 250 payable by the Revenue. 11. Let a copy of this judgment be forwarded to the Assistant Registrar, Income-tax Appellate Tribunal, Patna Bench "B", Patna, in terms of Sec.260 of the Act. Uday Sinha, J. 12 I agree.