JUDGMENT

The question involved in this appeal is whether the appellant-company was entitled to deduct the loss of £1,59,896 in V.S.A. in the accounting year 1957 corresponding to the assessment year 1958-59, The Income-tax Officer held that, if at all, the company was entitled to write off the loss only in the accounting year, 1956 and the Assistant Commissioner did not disturb the order of the Income-tax Officer. However, the Tribunal observed that the V.S.A. had come to a close on 20th May, 1958 which was the date agreed to by both the parties to the V.S.A. agreement as being the date from which the agreement ceased to operate. The Tribunal also found that the appellant-company had intimated that the net balance in the V.S.A. as on 20th May, 1958 would be written off and the Government also consented to it. The Tribunal, therefore, held that the claim that the V.S.A. came to an end in 1957 could not be accepted and the loss had to be held as not having arisen in the year 1957.

2. In the reference to the High Court the finding of the Tribunal was held to be sustainable being a possible and reasonable view in the circumstance of the case. In other words, the High Court also held that