COMMISSIONER OF INCOME TAX Vs. AJIT SPICES

JUDGEMENT

(1.) THE following common question has been, at the instance of the Revenue, referred to us by the Income-tax Appellate Tribunal, Cochin Bench:

(2.) THE Tribunal upheld the contention of the assessee that the losses which it claimed to set off arose from sales in the nature of forward contracts. THE losses arose, the Tribunal found, on account of holding stock, the value of which went down. THE Tribunal accepted the assessee's contention that the circular issued by the Central Board of Revenue under the repealed Indian Income-tax Act, 1922, governed the transactions in question and enabled the assessee to claim the set-off in terms of Sections 71 and 72 read with proviso (a) to Section 43(5).

(3.) THERE is considerable force in the submission made on behalf of the Revenue that the circular of the Board issued under the repealed enactment can be binding on the Department only to the extent it is consistent with the provisions of the present enactment. This is clear from Section 297 of the Income-tax Act, 1961, which reads: