Law:

Section:

Income tax:-- Business or capital loss-Assesses, a dealer in tends leaves-Assesses during course of business depositing certain amount as security for due performance of contract of purchases of tendu leaves-Amount forfeited, as contract was not fulfilled-Held it was a business loss and not a capital loss. (1975) 100 I T R 424 ; (1971) 79 I T R 530 and 35 I T R 461 ref. ORDER G. P. SINGH. C. J.-This is a reference made by the Income-tax Appellate Tribunal, referring for our answer the following question of law : Whether on the facts and in the circumstances of the case, the loss of Rs. 19,854 was a revenue loss? 2. The assesses is firm carry on the business of purchase and sale of tendu leaves. The relevant assessment year is 19-4-75. During the relevant accounting year, the assessee alongwith another person took a contract for the purchase of tendu leaves from the Orissa Forest Corporation Ltd. In connection with this contract a sum of Rs. 39,3!0 was deposited at security. As this contract eras not fulfilled, the Corporation forfeited the security. The assessee's-share of the security amount comes to Rs. 19,b54, and the assessee deduction of this amount as business loss in the assessment for the year 1974-75. The claim for deduction was disallowed by the Income-tax Officer, but was allowed by the Appellate Assistant Commissioner. The Tribunal allowed the appeal and restored the order of the Income-tax Officer. The reasoning of the Tribunal is that the deposit of amount of Rs. 39,350 for the contract with the Corporation was in the nature of capital expenditure for commencing the venture and, therefore, could not be deducted as a business loss in the assessment. 3. It has to be taken notice of that the business carried on by the assesses was…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492