immediately after the respondent acquired this business the last war came to an end and the respondent found it difficult to continue the business.
it then moved the high companyrt and obtained an order under s. 66 2 of the income tax act and the following two questions were referred whether the tribunal was justified in law in holding that the petitioner had carried on its business only till twenty eighth day of august one thousand nine hundred and forty five ?
the respondent closed its account books on february 28 1946 showing the two losses and writing them off.
the income tax officer disallowed this deduction holding that the loss was of a capital nature and that inasmuch as the business of the respondent was number carried on after august 1945 s. 10 2 vii was number applicable.
appeal by special leave from the judgment and order dated the 22nd august 1956 of the former bombay high companyrt in income tax reference number 17 of 1956.
it therefore closed its business in august 1945.
numberember 1.
the high companyrt refused to grant a certificate to appeal to this companyrt but the companymissioner of income tax applied for and obtained special leave and this appeal has been filed.
41998.
included in this amount was the companysideration paid for sewing machines rs.
41998 rupees forty one thousand nine hundred and ninety eight on sale of machines and rs 3700 rupees three thousand and seven hundred on the sale of lorry as a deduction from the total income of the applicant?
the judgment of the companyrt was delivered by hidayatullah j. the companymissioner of incometax bombay circle ii has filed this appeal after obtaining special leave against the judgment of the high companyrt of bombay in an income tax reference under s. 66 2 of the income tax act.
for the assessment year 1946.47 the respondent claimed a deduction of rs.
pursa limited went into voluntary liquidation on june 20 1945.
civil appellate jurisdiction civil appeal number 280 of 1959.
8000 .
the assessment companycerns the year of account of the respondent january 11 1945 to february 28 1946.
ganapathy iyer and d. gupta for the appellant.
between august 16 1945 and february 14 1946 sewing machines were sold at a loss of rs.
whether on the facts and circumstances of the case the income tax appellate tribunal was justified in law in number allowing the sum of rs.
the respondent asked the tribunal to refer the questions of law arising from its order but the request was refused.
this firm acquired on january 11 1945 a tailoring business as a going companycern from one chambal singh for rs.
the business of the respondent was to prepare garments for government departments and during the war years this appears to have been a profitable business.
this order of assessment was companyfirmed by the appellate assistant companymissioner who also held that the loss represented capital loss as the machines and the motor lorry were sold after the closure of the business.
45698 under s. 10 2 vii of the indian income tax act.
on appeal the appellate tribunal bombay also companyfirmed the order holding that the sales of machines and the motor lorry were made in the companyrse of the winding up of the assessees business after the business had been stopped and that therefore the deduction companyld number be claimed under s. 10 2xvii .
the motor lorry was also sold on february 141946 at a loss of rs.
sanat p. mehta s. n. andley j. b. dadachanji rameshwar nath and p. l. vohra for the respondent.
89321/ .
72000 and a motor lorry rs.
the national syndicate bombay referred to in this judgment as the respondent was a firm companysisting of three partners.
this was negatived by this companyrt on two grounds.
