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Issues involved: The judgment addresses the entitlement to weighted deduction u/s 35B(1)(a) of the Income-tax Act, 1961, and the deduction of business loss for imported electrical spare parts not taken delivery of.
Entitlement to Weighted Deduction: The Tribunal referred a question regarding the assessee's entitlement to weighted deduction u/s 35B(1)(a) for the assessment year 1971-72. A similar question was previously unanswered due to a lack of facts. The court returned the question unanswered again due to the same reason. Deduction of Business Loss: The Tribunal referred two questions regarding the deduction of business loss for imported electrical spare parts not taken delivery of. The assessee decided not to take delivery of rusted spare parts and incurred expenses for tracing the consignment. The Income-tax Officer, Appellate Assistant Commissioner, and Tribunal disallowed the claim, considering it more of a penalty or fine than a business loss. The Tribunal also noted the absence of an inspection report to prove the condition of the goods. Court's Decision: The court found in favor of the assessee, emphasizing that the decision not to clear the consignment was a business decision made after the consignment was traced by the assessee's agents. The court held that the departmental authorities had no grounds to question this decision without valid reasons. Therefore, the court answered both questions in the negative and in favor of the assessee, allowing the deduction of the business loss. Conclusion: The court's judgment favored the assessee's claim for deduction of business loss for imported electrical spare parts not taken delivery of, highlighting that it was a valid business decision and not subject to questioning without substantial reasons.
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