Ramachandran Nair, J.

1. Heard the senior standing counsel appearing for the revenue and senior counsel Shri. Sarangan appearing for the respondent-assessee.

2. The short question raised in the appeal filed by the revenue is whether the Tribunal was justified in confirming the order of the CIT (Appeal) upholding respondent-assessee's claim of loss of Rs.55,61,146/- on account of de-escalation of price of LPG cylinders supplied by respondent to oil companies. Admittedly the respondent was engaged in supply of LPG cylinders to government companies like HPCL, IOC and BPC. What is clear from the orders is that the regular bills raised for supplies were credited on the dates of supplies. The declared profit in the accounts for the assessment year 2000-01 was Rs.35,76,983/-. However, the assessee worked out a loss of Rs.55,61,146/- on account of de-escalation of prices later fixed by the company. After setting off the loss on account of de-escalation of price the assessee claimed a net loss of Rs.7,72,120/- which is done after finalisation of account. In the course of assessment, the Assessing Officer noticed that the assessee has taken credit of sale price in accordance with