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TMI Blog1977 (9) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... age of weight amounting to Rs. 107.47 quintals. This related to the damage of the goods in railway transit. The assessee explained to the ITO that the damage could not be ascertained now and recovery from the railway claim due to such damage could be shown as net profit in the year of receipt. The ITO took the view that the assessee would claim any short realisation of such damage claim from railway in the year of final settlement. Considering this be made an addition of Rs. 17,550 at average cost of Rs. 150 per quintal. 3. The assessee appealed on this point before the AAC relating to this addition of Rs. 17,550. The AAC has pointed out that the amount of Rs. 17,500 relates to loss in food grains on account of damage in railway. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d so that loss was to the extent of Rs. 17,615. The assessee has filed the details of the railway claim. the assessee has also filed the copies of the certificates showing the damage assessed by the railway authorities relating to various bags. The assessee has also filed the copies of the notices which were sent by the railway authorities claiming damage. From these documents it is evident that the assessee received damaged goods in the accounting year relevant to the asst. yr. 1975-76. The learned counsel for the assessee has submitted that the claim has been preferred against the railway authorities and the suit is still pending. 6. Now the question is whether under the circumstances the addition of Rs. 17,550 was justified. 7. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly a shadow hope of recovering all or any substantial portion of it. This ruling is clearly applicable to the facts of this case. 8. In the case of Laxmi Ginning Oil Mills vs. CIT Patiala 82 ITR 958 the assessee sold a certain quantity of oil to a company and the purchaser company did not take delivery of the oil contracted to be purchased by it and thus committed a breach of the contract and thus the assessee had to sell at a loss an then it filed a suit for recovering all the loss against the company and ultimately obtained a decree in 1962 and under these circumstances, their lordships held that the loss was suffered by the assessee in the accounting year relevant to the asst. yr. 1953-54 and if, as a result of the litigation, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that explanation was not satisfactory as the gross profit in such item in this line of business was found higher in other cases. The ITO held that no qualitative stock tally was maintained. He, therefore, made an addition of Rs. 5,000 in both the accounts. The AAC confirmed the addition made by the ITO. 12. The learned counsel for the assessee has filed the details of the purchases and sales in respect of rahar Dal and sugar account. The learned counsel for the assessee has submitted that the low gross profit was due to the reason that there was heavy market fluctuation in the price of sugar and there was restriction imposed by the Government for not charging higher price and the dealer was asked not to charge more price and sell the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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