COMMISSIONER OF INCOME TAX Vs. RAMJEEWAN SARAWGEE AND SONS
LAWS(CAL)-1976-5-29
HIGH COURT OF CALCUTTA
Decided on May 11,1976

COMMISSIONER OF INCOME-TAX Appellant
VERSUS
RAMJEEWAN SARAWGEE Respondents


Referred Judgements :-

COMMISSIONER OF INCOME-TAX V. PIONEER TRADING COMPANY PRIVATE LTD. [REFERRED TO]
RAGHUNATH PRASAD PODDAR VS. COMMISSIONER OF INCOME TAX CALCUTTA [REFERRED TO]
DAVENPORT AND COMPANY PRIVATE LIMITED VS. COMMISSIONER OF INCOME TAX WEST BENGAL 11 [REFERRED TO]
D M WADHWANA VS. COMMISSIONER OF INCOME TAX [REFERRED TO]
DAULATRAM RAWATMULL VS. COMMISSIONER OF INCOME TAX CENTRAL [REFERRED TO]
BHANDARI RAJMAL KUSHALRAJ VS. COMMISSIONER OF INCOME TAX MYSORE [REFERRED TO]
R.CHINNASWAMI CHETTIAR V. COMMISSIONER OF INCOME-TAX [REFERRED TO]





JUDGEMENT

Deb, J. - (1.)The following question is involved in this reference under Section 256(2) of the Income-tax Act, 1961:
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss claimed by the assessee in respect of the sum of rupees one lakh seventy-nine thousand and two hundred paid by it to M/s. Khardah Company Ltd. was not a loss arising from a speculative transaction and in directing the said sum to be allowed as a loss against the other business income of the assessee."

(2.)The assessment year is 1961-62. The accounting period ended on November 7, 1961. The assessee is a firm. The facts stated and found by the Tribunal may be briefly stated as follows : The firm is a dealer and a jute broker. Several contracts for sale and for specific delivery of jute goods by instalments were entered into by the firm in the accounting year. In this reference, we are concerned with only one contract, namely, the contract between the firm and Messrs. Khardah Co. Ltd. The firm failed to deliver those goods on due dates and committed a breach of the said contract and became liable to pay Rs. 1,79,200 as damages to M/s. Khardah Co. Ltd. in the accounting year.
(3.)The Income-tax Officer has rejected the firm's claim for deduction of the said amount with a finding that it was a speculative transaction. The Appellate Assistant Commissioner has sustained the said finding and has dismissed the appeal filed by the firm, but the Tribunal has reversed the said finding and has allowed further appeal by the firm. Hence, the above question is now before us at the instance of the Commissioner.
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