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TMI Blog1986 (7) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... of the court was delivered by JAGANNATHA SHETTY, ACTG. C.J.-By this reference under section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following five questions: " (1) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in upholding the assessment made by the Income-tax Officer on the assessees under section 168 of the Income-tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in rejecting the alternative plea of the appellants that the devaluation loss could be split into capital and revenue and treated as such in setting them off against capital gains and income of the assessee ? " So far as the first three questions are concerned, the answers rendered by this court in I.T.R.C. No. 15 of 1981 [ Jayakumari and Dilharkumari v. CIT (No. 2) [1987] 165 ITR 791 (Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loss should be allowed as deduction while computing the total income for the year in question. The sources of income are from " property " and from "other sources ". The said loss was claimed as a deduction against the income from the head " Other sources ". The Tribunal has rejected that claim. It has observed that the assessee was not holding the money in London as a trader and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere conversion of one currency into another currency cannot be considered as " exchange ". The exchange in the context must mean transfer of one capital asset for another capital asset. Like a sale, it requires two persons. There cannot be a sale to oneself. So too in the case of exchange. In the first place, the ownership of the money remained with the assessee even after the exchange in the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of making or earning such income. Obviously, the assessee has not been able to show that the amount claimed as deduction was laid out or expended for the purpose of making or earning the income. If it is not an expenditure laid out for that purpose, it cannot fall under section 57(iii). In any event, the loss occasioned by the exchange of currencies upon remittance unconnected with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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