2005 (10) TMI 37

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..... : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- The Income-tax Appellate Tribunal, Ahmedabad Bench "C", has referred the following question under section 256(1) of the Income-tax Act, 1961 ("the Act"), at the instance of the Commissioner of Income-tax. "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to a deduction of a sum of Rs. 3,45,000 as business loss, etc.?" The assessment year is 1986-87 and the relevant accounting period is S.Y. 2041. The assessee entered into a contract for importing dates from one M/s. Popular Trading Establishment of Dubai. For this purpose a letter of credit with Union Bank .....

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..... Officer to submit that the Tribunal had committed an error in confirming the order of the Deputy Commissioner of Income-tax (Appeals). It was submitted that in the eventuality of the assessee succeeding in the civil suit against the bank, the assessee would not be required to make any payment and would get deduction if the loss is allowed in the year under consideration. Mr. Sunil B. Parikh, learned advocate appearing on behalf of the respondent, resisted the reference and submitted that there was no error committed by the Tribunal so as to warrant interference. He pointed out that, as a matter of fact, the assessee had failed in the suit filed against the bank and hence the apprehension of the Revenue of getting double benefit was mispl .....

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..... r had placed undue emphasis on the lapse committed by the bank official but the said fact cannot wipe out the loss incurred by the assessee. In the light of the aforesaid findings recorded by the Tribunal, while concurring with the view expressed by the Deputy Commissioner of Income-tax (Appeals), it is apparent that the impugned order of the Tribunal does not suffer from any infirmity. In fact, the entire issue is based on facts and appreciation of evidence without involving any question of law. The Tribunal was thus right in holding that the assessee was entitled to deduction of a sum of Rs. 3,45,000 as business loss. The question, therefore, is accordingly answered in the affirmative, i.e., in favour of the assessee and against the R .....

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