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Issues:
1. Whether the loss arising from the nationalization of the coal industry is an admissible deduction as a business loss or a capital loss. 2. Whether the assessee can claim depreciation on the loss incurred due to compensation received being less than the depreciated value of assets taken over by the Government. Analysis: 1. The Tribunal initially held that the loss of Rs. 4,57,844 incurred by the assessee on the nationalization of the coal industry was a capital loss and not an admissible deduction as a business loss. The Commissioner (Appeals) disagreed, citing section 28(ii)(d) of the Income-tax Act, which deems compensation for the resting of management in the Government as business profits. The Commissioner reasoned that since the coal mines were taken over and nationalized, the loss should be treated as a business loss. However, the Tribunal reversed this decision, stating that section 28(ii)(d) did not apply as all assets were taken over, not just management, leading to the loss being classified as a capital loss. 2. The assessee contended that under section 32(1)(iii) of the Act, they should be allowed to claim depreciation on the loss incurred due to receiving compensation less than the depreciated value of assets taken over. The assessee requested a remand to the Tribunal to consider this aspect, which was not raised during the initial proceedings. The Court rejected this request, noting that the point was abandoned by the assessee after being decided against them by the ITO. The Court emphasized that the Tribunal's order only addressed the department's appeal, and the assessee failed to file a cross-objection or a separate appeal to raise the issue. As a result, the Court found no error in the Tribunal's decision and declined to remand the case for further consideration. In conclusion, the Court upheld the Tribunal's decision that the loss of Rs. 4,57,844 was a capital loss and not a business loss. Additionally, the Court rejected the assessee's request for a remand to consider claiming depreciation on the loss, as the issue was not raised during the initial proceedings and the assessee failed to file a cross-objection before the Tribunal.
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