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TMI Blog1980 (10) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... transporter and the broker, M/s Gadiya Textiles had to bring the goods from the transport company. The goods were loaded in the cart of M/s Gadiya Textiles. The broker took payment of freight etc. from M/s Gadiya Textiles and remitted the same to the assessee. 2. After two years, it was found that the said goods did not reach the assessee. They were lost in the transit. The assessee claimed the sum of Rs. 27,000 from the transporter company. Ultimately the matter was settled for Rs. 18,000 and the assessee had to pay Rs. 18,000 to M/s Gadiya Textiles, Pali. The assessee claimed it as business loss. 3. The ITO did not allow it. According to him the assessee failed to prove the loss of the goods. He was also of the opinion that no report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance was placed on the decision in the case of Sassoon J. David Co. (Pvt) Ltd. vs. CIT (1979) 10 CTR (SC) 383 : (1979) 118 ITR 261 (SC) and Addl. CIT vs. B.M.S. (Pvt) Ltd. (1979) 11 CTR (Mad) 146 : (1979) 119 ITR 321 (Mad). 7. The ld. Deptl. Rep. supported the order of the AAC. 8. I have heard the parties and perused the entire evidence on record. Simply because no report was lodged with the police it cannot be accepted that no loss took place of the goods in question. The ITO simply disbelieved the case of the assessee because no such report was lodged and there was also delay of making the claim by M/s Gadiya Textiles. The AAC more or less on the same ground agreed with the finding of the ITO. In my opinion, the finding of the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to earn the profit, the assessee can claim such deduction under s. 37 of the Act, even though there was no compelling necessity to incur such expenditure. The fact that somebody other than the assessee is benefited by the expenditure should not come in the way of the expenditure being allowed by way of deduction under s. 37 of the Act. In support of this proposition I am supported by the ratio of the decision in the case of Sassoon J. David. 10. From the aforesaid facts and circumstances of the case it is clear that the loss in question took place. There was a bona fide settlement between the parties and in pursuance of such settlement the payment of Rs. 18,000 was made by the assessee to the consignee on three different dates. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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