DINESH MILLS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Ahmedabad Bench 'A', has referred the following questions at the instance of the assessee as well as the Commissioner under Section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act') : At the instance of the assessee (assessment year 1977 -78 only in R, A. No. 223/Ahd of 1987) :

(2.) THE assessment years are 1977 -78, 1979 -80 and 1980 -81, and the relevant accounting periods are calendar years 1976 to 1979, respectively. The assessee is a limited company carrying on business in textiles and maintains the accounts by the mercantile system of accounting.

(3.) THE said loss was discovered during the year under consideration. However, the Income -tax Officer was of the view that the extent of loss remained indeterminate and unknown during the year under consideration, and the amount of actual loss could be known only when the assessee entered into compromise decree with the defaulter employee in the calendar year 1980 relevant to the assessment year 1981 -82. Accordingly, the assessee's claim for loss was disallowed.