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TMI Blog1995 (7) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 26,275 as loss occasioned in carrying on of business under section 37 of the Income-tax Act, 1961? 2. Whether on the facts and in the circumstances of the case and particularly in view of the assessee's submission that he was doing only shady business and money-lending business in a small scale and therefore gold and silver seized from him could not have belonged to him, the finding of the Appellate Tribunal that the assessee carried on business in primary gold is perverse and whether such a finding is based on any evidence or material? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the decision of the Supreme Court in CIT v. Piara Singh [1980] 124 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable to the assessee. We are unable to accept the contention of the learned standing counsel. The necessary material was available before the Tribunal as pointed out by the Tribunal and what was raised before the Tribunal was the question of law. In that view of the matter, the Tribunal was right in allowing the plea to be raised. It was then contended that the finding of the Tribunal that the petitioner was carrying on business in smuggling is a finding without any basis and ought not to have been arrived at and that finding without any material cannot be accepted in reference. A perusal of the order of the Tribunal shows that the plea the assessee was carrying on business in smuggling was never the case of the assessee. What all the Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incidental to it and, therefore, its deduction had been allowed under section 10 of the Act. The principle which can be deduced from this judgment of the Supreme Court is that where the very nature of the business is illegal and during the course of that illegal business the assessee loses the assets either by way of confiscation or otherwise, that becomes a business loss, which has to be allowed. 6. In the instant case, that has never been the case of the assessee and the losing of the money or the assets when the petitioner has indulged into some illegal activity would not justify deduction of the amount as a business loss. To the same effect, there is a decision of our High Court in CIT v. Kodandarama & Co. [1983] 144 ITR 395. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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