| Case ID |
15d286c9-9c15-4b19-9d2a-464ae2a2f80d |
| Body |
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| Case Number |
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| Decision Date |
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| Hearing Date |
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| Decision |
The court held that the amount claimed as a trading loss by the assessee-firm was not a realized trading loss during the accounting year. The loss represented an estimated depreciation in the value of the assets of the firm based on a revaluation made due to the reconstitution of the firm. The court emphasized that until the property taken in repayment of loans is sold or disposed of, there can be no realized trading loss in respect of that property. The assessment was made based solely on the profits of the business earned during the accounting year, and the claim for a deduction was dismissed as it did not meet the requisite criteria for a trading loss. |
| Summary |
In the case involving the K.A.R.K. Firm, which operated as a money-lending business, the Rangoon High Court addressed the nuances of trading losses under the Income-tax Act. The firm sought to claim a trading loss of Rs. 34,561, citing a decrease in the value of immovable property acquired in the course of business. However, the court clarified that for a loss to be recognized as a trading loss, it must be realized during the accounting year. The court ruled that the loss was merely an estimated depreciation and not an actual trading loss, emphasizing that until the property was sold or otherwise disposed of, no realized trading loss could be claimed. This case underlines the importance of clear valuation processes and the distinction between realized losses and mere depreciation, which is crucial for tax assessments and compliance. The decision serves as a precedent for similar cases involving claims of trading losses in the context of partnership reconstitution and asset valuation. |
| Court |
Rangoon High Court
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| Entities Involved |
Not available
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| Judges |
PAGE, C.J.,
DAS, J.,
MYA BU, J.
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| Lawyers |
A. Eggar for the Applicant,
N.M. Cowasji and Daniel for the Respondent
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| Petitioners |
Commissioner of Income Tax
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| Respondents |
K.A.R.K. Firm
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| Citations |
1934 SLD 57 = (1934) 2 ITR 183
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| Other Citations |
Not available
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| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
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| Sections |
28(i),
184,
10(1),
26A
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