Satish Chandra, J. - The Tribunal has found that in the course of the assessees normal business of taking forest contracts, the Assessee could not, owing to reasons beyond his control, work two lots for which he had deposited Rs. 8,200/- by way of security. The security was forfeited. Relying on the decision of the Bombay High Court in Narandas Mathurdas and Co. vs. C.I.T., Bombay South and Central, Bombay, the Tribunal held that the forfeiture represented trading loss of the Assessee.
2. At the instance of the Department, the Tribunal has referred, for our opinion, the question of law whether the sum of Rs. 8,200/- was allowable as a trading loss. In C.I.T. Kanpur vs. Sugar Mills, similar point came up for consideration before a Bench of this Court. The Bench approved the decision of the Bombay High Court and held that such circumstances the forfeited deposit was a business loss.
3. We, therefore, answer the question referred to us by holding that the sum of Rs. 8,200/- was a trading loss and was rightly allowed as a deduction. As no one has appeared on behalf of the Assessee, there will be no order as to cost.