The amount realised on sale to M s. Lachhminarain Kanoria Co. came to Rs.
11,48,399.
Appeal by special leave from the Judgment and order dated the 8th July, 1969 of Calcutta High Court in I.T.R. No.
The Appellate Assistant Commissioner on appeal by the assessee held that the transactions were number speculative and the loss should be treated as business loss relying on two decisions of this Court Bayana Bhimayya and Sukhdevi Rathi v. The Govt.
24 1 and the loss companyld be set off only against speculation profits, and as there were numberspeculation profits in that year he held that the loss would be carried forward and set off against speculation profits in the future.
The goods were in the godown of the mills and only the delivery orders addressed to the mills changed hands.
24 1 of the Income Tax Act, 1922.
The appellant hereinafter referred to as the assessee is a private limited companypany carrying on business in tea garden tools and requisites and also acting as agents for selling tea in fact the bulk of its income was from selling companymission on tea.
On June 18, 1958 the assessee entered into a companytract with M s. Lachhminarain Kenoria Co. to sell the aforesaid quantities of Twill and companyn sacks.
10,49,865/ .
CIVIL APPELLATE JURISDICTION Civil Appeal No.
in the relevant previous year which ended on June 30,1958, the assessee for the first time in its history entered into certain transactions in jute.
The assessee had numbergodown for keeping the goods and had number handled them.
The assessee had however purchased the companyn sacks and B Twill for Rs.
98,534/ to the assessee and the assessee claimed adjustment of this loss in the companyputation of its income for the assessment year 1959 60.
The Income tax officer held that the transactions involving mere transfer of delivery numberes and number actual delivery of the goods were of a speculative character as companytemplated in explanation 2 to sec.
The assessment year in question is 1959 60.
N. Gupta, for the appellant.
The Judgment of the Court was delivered by GUPTA, J. This appeal by special leave turns on the true meaning and scope of explanation 2 to sec.
The companyn sacks were all purchased from Tulsider Jeweraj under three companytracts for 800 bales, 1000 bales and 700 bales respectively.
On April 17, 1958 the assessee had companytracted to purchase 1100 bales of B Twill and 2500 bales of companyn sacks the companytract for B Twill was with two parties, M s. Raghunath Sons P Ltd. for 500 bales and M s. Mahadeo Ramkumar for 600 bales.
2034 of 1970.
C. Sharma, O. P. Dua and S. P. Nayar, for the respondent.
of Andhra Pradesh 1 and duni Chand Rataria v. Bhuwalke Brothers Ltd. 2 The Department took an appeal to the Tribunal and the Tribunal relied on the decision of the Calcutta High Court in D. M. Wadhwana v. Commissioner of Income tax, West Bengal 3 to hold that this case came within the scope of sec.
The transactions thus resulted in a loss of Rs.
60 of 1968.
