Steel Enterprises Pvt. Ltd. vs Commissioner of Income Tax

A.N. Sen, J.—In this reference u/s 66(1) of the Indian Income Tax Act, 1922, the following two questions have been referred.

"(1) Whether, on the facts arid in the circumstances of the case, the loss of Rs. 71,460 arising out of a transaction between the assessee and Maheshwari Industries, Delhi, was of a speculative nature within the meaning of Explanation 2 to Section 24 of the Indian Income Tax Act, 1922 ?

(2) If the answer to the aforesaid question is in the affirmative, whether the same is liable to tax. for that year u/s 10(1) of the Indian Income Tax Act, 1922 ?"

The facts of the case have been fully set out in the statement of the case.

As in our view the first question raised is clearly covered by the decision of this court in the case of Daulatram Rawatmull Vs. Commissioner of Income Tax (Central), we do not consider it necessary to set out the facts in any detail. We also note that the view expressed by this court in the case of COMMISSIONER OF Income Tax, WEST BENGAL Vs. PIONEER TRADING COMPANY PRIVATE LTD., draws clear support to the decision of, this court taken in the case of Daulatram Rawatmull v. Commissioner of Income Tax [1910] 78 ITR 503

Following the decision of this court in the aforesaid two cases we answer the question No. 1 in the negative, in favour of the assessee and against the revenue.

In view of our answer to the first question, the second question as framed really does not call for any answer. We may, however, only add that Mr. Bajoria, learned counsel for the assessee, has fairly conceded that the answer to the said question is concluded by a decision of the Supreme Court and that is against the assessee.

In the facts of this case, each party will pay and bears its own costs.

Hazra, J.

I agree.