- (1.) THE present application under Section 256(2) of the Income-tax Act, 1961, seeks calling of the following questions for the opinion of this court ; "1. Whether the Income-tax Appellate Tribunal was correct in law in holding that the loss of damaged goods admittedly suffered by the assessee could not be allowed as deduction while working out the income from the business for the reasons given by the Commissioner of Income-tax (Appeals) who did not afford any opportunity to the appellant to explain the same and without dealing with the submissions of the appellant against the action of the Commissioner of Income-tax (Appeals) ?
(2.) WHETHER the Income-tax Appellate Tribunal was correct in law in not allowing the loss of damaged goods from the profit estimated on flat rate basis in view of the decision of the Allahabad High Court in the case of Saraya Engineering Works v. CIT [1987] 168 ITR 455, where the facts were quite different as against in the matter of the appellant where such losses have been allowed by the Revenue in the assessment year 1981-84 (sic) as pointed out by the appellant ? Whether the Income-tax Appellate Tribunal was correct in law in rejecting the claim for exemption under Section 54B in respect of the sale of agricultural land which could not be used, because of adverse possession ?" 2. So far as question No. 5 is concerned, we find that the Tribunal has recorded a finding that "the appellant has not been able to prove his claim. The appellant has also not shown any agricultural income from his land. Before us, it has been claimed that there was adverse possession of the land by others and the land was in fact intended for agricultural purposes. In our view, the explanation cannot be accepted as the land was not actually used for agricultural purposes for the appellant or his parent. The appellant has also not shown that the land was purchased for the use of agricultural purposes". The said finding recorded by the Tribunal is a finding of fact. Once the land in question has not been proved to have been used for agricultural purposes the benefit of Section 54B was rightly not given to the petitioner, hence, we do not find that the said question arises in this case. 3. However, we do feel that the following question arises for consideration by the Tribunal : "Whether, on the facts and in the circumstances of this case, the Tribunal was justified in disallowing the loss of Rs. 1,92,106 claimed on account of damage of the goods ?" The Tribunal is, therefore, directed to draw up a statement of the case and refer the aforesaid question for the opinion of this court. The present application is partly allowed. Costs on parties.;