TMI Blog1982 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed income, the, act of possession and disposition occurring on the same date ?" The brief facts are these. For the assessment year 1964-65 (the previous year ended on 3lst March, 1964), the assessee, an individual, was assessed on an income of Rs. 29,000, Rs. 26,000 being unexplained investment in the acquisition of gold alleged to have been seized from the possession of the assessee on April 13, 1963, by the Central-Excise authorities at Mathura junction Railway Station, and Rs. 3,000, estimated income from sarrafa or other business. The assessee filed an appeal. The AAC set aside the assessment order on the ground that no reasonable opportunity had been allowed to the assessee. The case was remanded to the ITO for making the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to be his income of the financial year in which he was found to be in possession of it. An alternate plea was taken before the Appellate Tribunal on behalf of the assessee and it was that the assessee was carrying on this illegal business and any loss resulting in the normal course of such business should be allowed as a deduction. This contention, as well, was repelled by the Appellate Tribunal and in the result the appeal was dismissed. Now, at the instance of the assessee, the question mentioned above has been referred for our opinion. It was submitted before us on behalf of the assessee by his learned counsel, Sri Janardan Sahai, that the income of Rs. 24,000 has been determined on account of unexplained investment in gold. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity. If after setting off losses against income under the same head the net result is still a loss, such loss may be set off under s. 71 against income of the same year under any other head. It would thus be seen that if the net result in respect of any source under a particular head is a loss, that loss must first be set-off against income from another source under the same head and if even then, the net result is still a loss, such loss may be set off against income of the same year under any other head. In the instant case, a sum of Rs. 24,000 has been determined as the assessee's income under the head " Undisclosed sources " on account of unexplained investment made in gold. There appears to have been no other source of income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of a penalty or fine, could not be treated as an admissible deduction. The learned judicial Member agreed with the view but added: " That the assessee failed to show that the loss of gold was on account of trading activity. He has no such activity." It would be seen that there is no concurrent finding by the two learned Members, who constituted the Bench of the Appellate Tribunal which decided the assessee's appeal, that the assessee had failed to show that the loss of this gold was a business loss. The Appellate Tribunal did not say that this alternative contention which had been raised before them for the first time by the assessee could or could not be entertained. There was no concurrent finding recorded on the question as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities and consequent confiscation was a necessary incident and constituted a normal feature of such an operation. On this view, the loss was held as incidental to business and as such an allowable deduction under s. 10. Since in the present case the question as to whether or not the confiscation of the gold amounted to a business loss has not been decided by the Appellate Tribunal, we cannot give an answer to the question referred in the affirmative or in the negative. We, therefore, answer the question by saying that the Income-tax Appellate Tribunal was not correct in holding that the assessee was not entitled to an adjustment of the loss against the assessed income for the reasons recorded by it. The Appellate Tribunal would go i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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