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TMI Blog1986 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ted against the judgment of the High Court of Orissa disposing of an income-tax reference and answering the following question in favour of the Revenue and against the assessee : " Whether, on the facts and in the circumstances of the case, the loss of Rs. 30,045 claimed by the assessee is a capital loss or a revenue loss ? " The assessee is a private limited company carrying on business as cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby sustaining a loss of Rs. 45,241. The assessee treated this as the value of the excavated earth and apportioned the amount in its accounts in the following manner, Rs. 8,196 as the cost of the earth for the assessment year 1965-66, Rs. 30,045 towards the earth excavated in the assessment year 1966-67 and Rs. 7,000 towards the earth excavated for the assessment year 1967-68. The Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a deduction. The question in this appeal before us is a short one. Can it be said that the loss of Rs. 30,045 is a capital loss or a revenue loss? It is not in dispute that the assessee did not deal in land. It was a contractor and it had acquired the land for the purpose of obtaining a ready supply of earth in order to fulfil the contract with the Railway Administration. The land was not its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only right under the lease was to take away the sand lying on the land, and, in fact, as the sand lay on the surface, no question arose of digging and excavating for the sand, and no operations were to be performed on the land. The court laid great emphasis on the circumstance that the assessee did not acquire the land. Therefore, the court held that the assessee " did not acquire any fixed or ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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