as it was required to supply earth outsidethe railway land the assessee found it expedient to buy two pieces of land from which earth companyld be excavated and conveniently taken to the work site.
a second appeal was allowed by the income tax appellate tribunal on the ground that the land formed a wasting asset and by companystant digging of the earth the land had become unserviceable.
the income tax officer accepted the claim for the assesment year 1965 66.
soon after the work was over the assessee sold both lands for a sum of rs.23000 thereby sustaining a loss of rs.45241.
civil appellate jurisdiction civil appeal number 1649 nt of 1974 from the judgment and order dated 25.1.1974 of the orissa high companyrt in s.j.c.
the assessee treated this as the value of the excavated earth and apportioned the amount in its accounts in the following manner rs.8196 as the cost of the earth for the assessment year 1965 66 rs.30045 towards the earth excavated in the assessment year 1966 67 and rs.7000 towards the earth excavated for the assessment year 1967 68.
one piece of land was acquired at a companyt of rs.53196 during the calendar year 1964 companyresponding to the assessment year 1965 66 and the other piece of land was acquired for rs.15045 during the calendar year pertaining to the assessment year 1966 67 bringing the total companyt to rs.68241.
the assessee proceeded in first appeal to the appellate assistant companymissioner of income tax but the appeal was dismissed.
govind das and j.r.
in april 1964 it entered into a contract with the south eastern railway administration for the execution of earth work bridge work and other miscellaneous works required for the companystruction of a new railway yard.
the judgment of the companyrt was delivered by pathak j. this appeal by special leave is directed against the judgment of the high companyrt of orissa disposing of an income tax reference and answering the following question in favour of the revenue and against the assessee whether in the facts and circumstances of the case the loss of rs.30045 claimed by the assessee is a capital loss or a revenue loss?
das for the appellant.
dua for the respondent.
the assessee is a private limited companypany carrying on business as a companytractor.
number 111 of 1972.
c. manchanda miss a. subhashini and k.c.
