JUDGMENT

R. M. SAHAI, J. :—Legal issues that arise for consideration in this appeal, directed against the decision of the High Court in Commr. of Income-tax, Tamil Nadu v. Universal Radiators, (1979) 120 ITR 906, on questions of law referred to it in a reference under the Income-tax Act (in brief the Act) are, if the excess amount paid to the assessee due to fluctuation in exchange rate was taxable either because the payment being related to trading activity it could not be excluded under Section 10(3) of the Act even if it was casual and non-recurring in nature or it was stock-in-trade, therefore, taxable as revenue receipt or in any case the compensation for the loss of goods could not be deemed anything but profit.

2. Shorn of details the assessee, a manufacturer of radiators for automobiles booked copper ingots from a corporation in the United States of America for being brought to Bombay where it was to be rolled into strips and sheets and then despatched to assessee for being used for manufacture. While the ingots were at sea, hostilities broke out between India and Pakistan and, the vessel carrying the goods was seized by the authorities in Pakistan. The claim of the assessee