Judgement

 Patanjali Sastri, C.J.I. -

This is an appeal from a judgment of the High Court of Judicature at Calcutta answering a reference under S. 66-A, Income-tax Act, 1922 (hereinafter referred to as the Act) in favour of the respondent herein.

2. The respondent carries on business as selling agents of the Bengal Potteries Ltd., and he was prosecuted under S. 13, Hoarding and Profiteering Ordinance, 1943, (Ordinance No. 35 of 1943) on a charge of selling goods at Prices higher than were reasonable in contravention of the provisions of S. 6 thereof. It appears that before the prosecution was launched in August 1944, respondent s business premises were searched and a part of his stock was seized and taken away. The respondent defended the case, spending a sum of Rs. 10,895, and the prosecution ended in an acquittal on 16-2-1945. In his assessment to income-tax for the year 1945-46, the respondent claimed the deduction of the said sum of Rs. 10,895 from the profits of his business under S. 10 (2 ) (XV) of the Act. The Income-tax Officer disallowed the claim but the Appellate Assistant Commissioner allowed it, and his decision was confirmed by the Income-tax Appellate Tribunal, Calcutta