Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business loss - Allowability of - Assessment year 1974-75 - Assessee-firm was a dealer in gold and silver ornaments and silver coins - Assessee claimed deduction in respect of silver bars handed over to munim which were robbed from him and an FIR was lodged with police in that connection - It also claimed deduction in respect of silver coins handed over by M to it for sale which were also allegedly robbed from said munim - It was found that munim was not assessee's employee and that on date of robbery assessee did not have sufficient stock in its books of account - Assessee was also found to be not doing any commission business - It was further found that M would not have handed over coins to assessee as on that date, in market, silver price was declining and M was not in need of money - There was no receipt issued to M at time of taking delivery of coins by assessee - Whether on facts claim of assessee could be allowed -Held, no Explanation to section 271(1)(c), read with section 274(2), of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1974-75 - Whether where assessee's case was transferred to IAC under section 274(2) before its deletion, penalty order passed by him after deletion of said sub-section would become invalid - Held, no - Whether deletion of Explanation to section 271(1)(c) with effect from 1-4-1976 would make any difference to its applicability to assessment years in which it was in operation - Held, no FACTS The assessee-firm was a dealer in gold and silver ornaments and silver coins. For the assessment year 1974-75, it claimed deduction as business loss being the value of the silver bars allegedly robbed from the munim of the assessee and the other alleged to have been paid by it to one M in lieu of 2,500 old silver coins handed over to it for sale. The assessee stated that the munim was entrusted with silver bars for sale, as well as said old silver coins for sale at Varanasi and while at the railway station, he was robbed by three persons. An FIR was lodged with the police in that connection. The silver bars were out of the assessee's stock, whereas the silver coins…

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