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TMI Blog1975 (3) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... income ? 2. If the answer to the above is against the assessee, was the Tribunal justified in holding that neither profit nor loss of the work was to be taken into account in the assessment of income ? " The assessee is a private limited company, and it carries on the business of engineers and contractors. It entered into a contract with the Government of Jammu Kashmir on September 7, 1964, for the construction of a bridge across a river for an amount of Rs. 33,50,300 as per terms and conditions set out in a letter given by the Chief Engineer, dated June 8, 1964. The contract was to be completed in a period of eighteen months from the date of the placing of the order. As it was rainy season at the time the contract was entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs, 5,39,200 as secured advance against materials stocked at the site of the work. We are not concerned with the receipt of Rs. 5,39,200 in the present reference. In the assessment proceedings for the financial year 1965-66 (assessment year 1966-67), the assessee claimed the entire expenditure of Rs. 13,43,121 to be a business loss, and the receipt of Rs. 11,11,100 to be repayable advances and not income. The Income-tax Officer held that the sum of Rs. 11,11,100 was the income of the assessee, and that the total expenditure was Rs. 9,45,024 after making certain deductions, and that the difference of Rs. 1,66,076 was profit of the assessee in respect of the contract in the relevant assessment year. Thus, in the place of a business lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " But a question may arise here whether it was in fact the loss and whether the assessee is entitled to carry forward this loss or set it off against the income from other contracts. That it was a loss incurred in the peculiar circumstances in which the assessee is placed, namely, uncertainty of expenditure or loss caused by the enemy action and the uncertainty of the value of the materials to be recovered could not be gainsaid. It is understandable that the assessee-company was not in a position as at the end of the accounting year to arrive at the work-in-progress so as to arrive at the profit or loss relatable to the receipts of Rs. 11,11,100. At the same time it is also not possible to say that the assessee incurred a loss of Rs. 2,31,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipts in each year of construction although the contract is not complete. As regards the second question, the Tribunal pointed out that the question as to whether any profit or loss has to be taken into account on the basis of facts was a pure finding of fact based on the appraisal of the evidence placed before the Tribunal and could in no circumstance give rise to a question of law, and that it was not the suggestion on behalf of the assessee-company that there was no evidence before the Tribunal to justify its conclusion. In that view the Tribunal declined to refer the questions mentioned in the application, and dismissed the application. The assessee has, therefore, filed the present petition, I.T.C. No. 25 of 1974, under section 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law arising out of the order of the Appellate Tribunal, it is a settled proposition which cannot be disputed. In fact, the learned counsel could not cite any authority to the contrary. Consequently, no purpose would be served by directing the Appellate Tribunal to refer the question for the opinion of this court. As regards the second question, it is obvious that the Appellate Tribunal, on the facts and circumstances of the case, drew an inference of fact that the assessee-company was not in a position as at the end of the accounting year to arrive at the work-in-progress so as to arrive at the profit or loss relatable to the receipts amounting to Rs. 11,11,100, that at the same time, it was also not possible to say that the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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