D.N. Patel, J

1) This appeal has been preferred against the judgment and order delivered by Income Tax Appellate Tribunal, Circuit Bench Ranchi, camp at Jamshedpur in Income Tax Appeal No.355/Pat/96 & 138-140/Pat/05 order dated 14th December, 2005.

2) Counsel for the appellant has raised the following substantial questions of law:

1) Whether, on the facts and in circumstances of the case the ITAT are justified in allowing the insurance claim written off by the assesse, even though it related to an earlier year and not the assessment year in question as also since the claim was related to the loss of a capital asset?

2) Whether, on the facts and in circumstances of the case the ITAT are justified in upholding the order of the CIT(A) in restricting the additions made u/s 40A(3) of the Income Tax Act, 1961 to 20% of the cash purchases in excess of Rs.10,000/-, by taking recourse to a prospective amendment made in Section 40A(3) of the IT Act, 1916 w.e.f. 01/04/1996?”

3) Counsel for the appellant submitted that the respondent-assessee had declared total loss of Rs.15,03,098/-in the return of Income filed on 29th of October, 1993 for the assessment year 1993-94. Thereafter, noti