Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business loss/deductions - Allowable as - Assessment year 1983-84 - During assessment proceedings for assessment year 1983-84, assessee claimed a loss on account of goods destroyed by fire in assessment year 1978-79 - ITO rejected claim of assessee - Tribunal also disallowed claim of loss on ground that there was no justification in not writing off stocks which were destroyed and not claiming loss in assessment year 1978-79 when actual loss had taken place - Whether finding of Tribunal was prima facie a finding of fact - Held, yes FACTS A survey under section 133A was conducted at the business premises of the assessee and discrepancies of stock were found. The assessee voluntarily disclosed, stock of certain amount and surrendered it to be included in its total income. Thereafter, the assessee filed a revised return claiming a loss on account of goods destroyed by fire in the assessment year 1978-79. The assessee explained that the matter was in dispute and a civil suit was going on to claim the loss, which was finally decided only in the relevant accounting year and as it could not recover the loss, the claim was made in the return for the relevant assessment year. The ITO rejected the claim of the assessee. On appeal, the Commissioner (Appeals) held that it was a trading loss and the assessee was entitled to claim the loss in the year under consideration. The Tribunal held that there was no justification either according to the principles of accountancy or on the basis of law, in not writing off the stocks which were destroyed and, not claiming the loss in the assessment year 1978-79, when the actual loss had taken place and, accordingly, disallowed the claim of loss. On reference : HELD The finding of the Tribunal was prima facie a finding of fact. However, in the absence of any assistance from the assessee, the reference was returned unanswered. [Para 5] JUDGMENT N.K. Sud, J. - At the instance of the assessee, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short 'the Tribunal') has referred the following question of law arising out of its order dated 27-9-1990 relating to assessment year…

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