1951 (5) TMI 10

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..... ed. In his income-tax return for the year 1946-47 the applicant showed his total net income as ₹ 26,000 odd but he showed a gross loss in speculative transactions of ₹ 24,000 odd and his net loss under this heading as ₹ 23,412. In support of his claim for loss on the speculative transactions the applicant produced eight invoices from arhtias at Indore, Bikaner and Muzaffarnagar. The amounts of these losses were also entered in his books. He produced no sauda bahi, nor did he produce any yearly statement from his arhtias showing the total transactions entered into by him with them. The Income-tax Officer accepted the gross income of the applicant as appearing in his books but in respect of his claim for loss on speculative .....

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..... not been taken into account. They held that in the case of the present applicant they were not satisfied that the assessee had shown the true state of affairs regarding the speculative transactions. They held that the absence of a saudi bahi was not without purpose particularly when the applicant had kept regular accounts of his other business activities. They held that the loss had not been proved to their satisfaction although, no doubt, particular items of loss evidenced by the vouchers may have been correct. They held therefore that the claim to loss of ₹ 23,412 was rightly disallowed. The applicant then applied to the Tribunal to state a case to this Court. The Tribunal had held that the evidence was insufficient to prove the los .....

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..... ary amount of profits from his business or from one side of his business. What has been done in the result is that one side of his business has been ignored altogether for the purposes of income-tax. As stated by the Appellate Tribunal it was for the assessee claiming to offset a particular amount of loss to establish that he had incurred such amount of loss. The Income-tax authorities in my opinion undoubtedly were entitled to take into consideration the fact that the assessee kept no contemporaneous record of the speculative transactions into which he entered. He purports to have made his entries in his accounts only on receiving invoices from his arhtias. When he received these invoices he was naturally aware whether the transactions res .....

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