ISHWAR DAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the following question of law has been referred fay the Income-tax Appellate Tribunal, Lucknow, under section 256(2) of the Income-tax Act, 1961, for opinion of this court:

(2.) THE facts in a nutshell are as follows :

(3.) ON the basis of the said observation of the Supreme Court, it was argued that the tax collector cannot be heard to say that he will bring the gross receipts to tax but not the losses. He can only tax the profit of a trade or business and that cannot be done without deducting the losses and the legitimate expenses of the business. It was further submitted that admittedly the assessee was carrying on both legal and illegal business. These are two sides of the same coin. If the confiscation of gold and gold ornaments was a loss occasioned in pursuing the business, it is a loss inasmuch as the same way as if the same had been stolen or dropped on the way while carrying on the business. It is a loss which springs directly from the carrying on of the business and is incidential to it.