1986 (7) TMI 6

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....ant accounting period being the year ended March 31, 1963, the assessee claimed a loss of Rs. 53,650 sustained by it on disposing of its subscription to the Orissa Government Floated Loan, 1972. It claimed that the loss suffered by it was revenue loss and, therefore, deductible against its profits for the year. The Income-tax Officer disallowed the loss in the view that it was a capital loss. The assessee's appeal was dismissed by the Appellate Assistant Commissioner of Income-tax. But on second appeal, the Income-tax Appellate Tribunal accepted the contention of the assessee that the subscription to the Government Loan was conducive to its business and that the loss arose in the course of the business, and that, therefore, the assessee....

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....nless a challenge is directed specifically by a question framed in a reference against the validity of the impugned findings of fact on the ground that there is no evidence to support them or they are the result of a misdirection in law. There is a long line of cases decided by this court laying down this proposition. See India Cements Ltd. v. CIT [1966] 60 ITR 52, 64 (SC), Hazarat Pirmahomed Shah Saheb Roza Committee v. CIT [1967] 63 ITR 490, 495, 496 (SC), CIT v. Greaves Cotton & Co. Ltd. [1968] 68 ITR 200 (SC), CIT v. Sri Meenakshi Mills Ltd. [1967] 63 ITR 609, 613 (SC), CIT v. Madan Gopal Radhey Lal [1969] 73 ITR 652, 656 (SC), Hooghly Trust (P.) Ltd. v. CIT [1969] 73 ITR 685, 690 (SC), CIT v. Imperial Chemical Industries (India) (P.) L....

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....tial treatment would be granted to it in the placing of orders for motor vehicles required by the various Government Departments and to the further benefit of an advance from the Government up to 50 per cent. of the value of the orders placed. Pursuant to that understanding, an advance to the extent of Rs. 18,37,062 was received by the assessee and a circular was also issued by the State Government to various Departments to make purchases of the vehicles required by them from the assessee. Because of the advance received from the Government, the assessee was able to save Rs. 45,000 as bank interest during the year. It was also noticed that the sales shot up substantially. On September 4, 1961, the assessee made a deposit of Rs. 5 lakhs cons....

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.... took the view that the investment was of enduring benefit to the assessee and, therefore, it could not be allowed. We find it difficult to hold that an enduring benefit was brought about by the assessee investing in the loan. So far as orders from the Government Departments were concerned, the material on record shows that on August 30, 1961, it was decided to purchase 16 jeeps, 8 trucks and 4 one tonne pick-up vans. There is nothing to show that there was any reason for the assessee to hold on to the investment in the loan indefinitely. There was no enduring advantage. Accordingly, we hold that the investment did not bring in an asset of a capital nature and that, in the circumstances of the case, the loss suffered by the assessee was a r....