1. - In this reference made at the instance of the Revenue, the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as "the Tribunal") has referred the following question for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in treating the loss of Rs. 13,050 in groundnut oil as a trading loss ? "

2. This reference relates to the assessment year 1975-76. Shri Dina Lal Gupta, respondent herein (hereinafter referred to as "the assessee"), was carrying on the business of adat in the name of M/s. Dinalal Narendra Kumar, at Jaipur. The assessee entered into an agreement on October 26, 1974, with M/s. R.C.S. Vanaspati Industries, Ltd., Jaipur, for the sale of 290 quintals of groundnut oil at Rs. 795 per quintal. The said goods were to be supplied on any date till November 15, 1974. On November 11, 1974, M/s. R.C.S. Vanaspati Industries Ltd. demanded the supply of the goods but by that time, the prices had gone up and the assessee expressed his inability to supply the goods and preferred to pay damages at Rs. 45 per quintal and a sum of Rs. 13,050 was paid by the asses