| Case ID |
0acdf5ab-cd47-49ed-9408-c177c3c50864 |
| Body |
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| Case Number |
Income-tax Appeal No. 217 of 1953-54 |
| Decision Date |
Dec 05, 1953 |
| Hearing Date |
|
| Decision |
The Income Tax Appellate Tribunal allowed the appeal regarding the claim of Rs. 18,500 for the loss of stock in trade due to fire. The initial disallowance by the Income-tax Officer was based on the lack of proof for the destruction of stock. However, the Tribunal recognized the inherent risks associated with the business and ruled that fire is a risk incidental to trade, allowing the deduction of loss incurred from the fire. Ultimately, the Tribunal estimated the allowable loss at Rs. 10,000, emphasizing the need for a practical understanding of business risks and the necessity for insurance against such losses. |
| Summary |
This case revolves around a dispute regarding the loss of stock in trade due to fire, emphasizing the principles of the Income-tax Act, 1922. The Income Tax Appellate Tribunal addressed the arguments surrounding the admissibility of such losses and the nature of risks associated with business operations. The ruling clarified that fire risks are indeed part of the ordinary challenges faced by businesses, particularly those dealing with flammable materials. This case is instrumental in understanding how businesses can claim deductions for losses incurred through unforeseen events like fire, aligning with established practices in taxation law. The decision also sheds light on the importance of maintaining proper records and the implications of not doing so in claiming deductions. It highlights the necessity for businesses to prepare for potential losses and the role of insurance in mitigating risks, providing a comprehensive view of the legal landscape surrounding business operations and taxation. |
| Court |
Income Tax Appellate Tribunal
|
| Entities Involved |
Not available
|
| Judges |
Syed Ali Khan
|
| Lawyers |
Ali Hassan,
S.M. Amin
|
| Petitioners |
Not available
|
| Respondents |
Not available
|
| Citations |
1959 SLD 138,
(1959) 1 TAX 4,
1959 PTD 44
|
| Other Citations |
Motamal lethumal v. Commissioner of Income-tax Bihar and Orissa(15 I T R 155),
Green v. Gliksten & Sons Ltd.((1929) 14 Tax Cas. 364)
|
| Laws Involved |
Illegal Dispossession Act, 2005,
Income-tax Act, 1922
|
| Sections |
10,
10
|