SANKAR PRASAD MITRA, J.

( 1 ) THIS is a reference under Section 66 (1) of the Indian Income-tax Act, 1922. The assessment year is 1959-60. The corresponding accounting year was the year ended on the 31st May, 1958. The assessee is Messrs. Budge Budge Investment Co. Ltd. , which, inter alia, deals in jute and hessian. In the course of its dealings in jute and hessian during the relevant accounting year the assessee sustained a loss of Rs. 75,609. The Income-tax Officer refused to treat this loss as a business loss. He found that in no case delivery of the goods was given or taken. He, therefore, treated' the loss as a speculative loss.

( 2 ) BEFORE the Appellate Assistant Commissioner it was contended on behalf of the assessee that contracts for each transaction of purchase and sale were in the form prescribed by the Indian Jute Mills Association and these contracts were settled in each case by giving and taking delivery of pucca delivery orders. The Appellate Assistant Commissioner held that, as in each case delivery was given and taken by exchange of pucca delivery orders, though the entire amount of purchases and sales were paid and received in full in cash, in the absence of a

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