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TMI Blog1985 (5) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany which is engaged in the business of hiring out navigation receivers and equipment to its various customers in India. Such navigation receivers and equipment are in turn taken on hire by the assessee from Dacca Navigation Concessions Ltd., London (hereinafter referred to as the "London company "), vide an agreement dated December 19, 1961. The dispute before the Tribunal was in regard to an additional liability arising from the devaluation of Indian currency on June 6, 1966. The Income-tax Officer disallowed the said additional liability due to devaluation of Indian currency on June 6, 1966, amounting to Rs. 57,103 because, in his opinion, the said sum represented a provision in the accounts towards the difference in exchange in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... navigation receivers and equipment on hire from the London company. The Tribunal was of the opinion that the liability of Rs. 57,103 was not a separate and distinct liability apart from the original transaction of payment of hire charges by the assessee. It was also of the view that there was no distinction between hire charges credited to the account of the London company in the earlier years and the hire charges now credited in the year 1966. The Tribunal, therefore, held that as the original credit was allowed as a deduction to the assessee, the credit now given to the account of the London company should also be allowed as a deduction. The Tribunal further held that a liability would be allowed as a deduction under the same head under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case is whether the loss or expenditure of the assessee as a result of the devaluation is of a capital nature or of a revenue nature. Mr. Kalyan Roy, for the assessee, has contended in the course of his submissions that a loss has to be considered in a different way from a gain in computing business profits. There may be cases where a loss de hors the business is allowed as a business loss, whereas a gain arising in similar circumstances Will never be a business gain. In our view, this distinction again is of little significance as the gain or the loss, as the case may be, has to be connected with the business before the Same can enter into the computation of profits." In this case, the assessee maintained its accounts on mercan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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