Business asset loss deduction upheld where animals became permanently useless after one manufacturing line was discontinued.

Loss from the sale of animals used in the assessee's business was deductible where the animals were not stock-in-trade, the business had not been closed, and only one line of manufacture had been discontinued. The court gave the words "have died or become permanently useless" their plain and ordinary meaning and rejected ejusdem generis, holding that the statutory language did not justify confining the general words by grouped particulars. On the undisputed facts, the animals had become permanently useless for business purposes, so the loss was allowable under section 10(2)(viii) and the issue was answered in favour of the assessee.

---

---

Issues: Whether the loss arising from the sale of animals, which had been used in the assessee's business and had become permanently useless after discontinuance of one line of manufacture, was allowable as a deduction under section 10(2)(viii) of the Indian Income-tax Act, 1922.

Analysis: The animals had been used for the purposes of the assessee's business and were not stock-in-trade. The business itself had not been closed; only one activity within a continuing business had been discontinued. The expression "have died or become permanently useless" was held to carry its plain and ordinary meaning, and the rule of ejusdem generis was found inapplicable because the statutory language did not present the kind of grouped particulars needed to confine the general words. On the undisputed facts, the animals had become permanently useless for the assessee's business purposes.

Conclusion: The loss was deductible under section 10(2)(viii) and the question was answered in the affirmative, in favour of the assessee.

---