1. ' AJMAL MIAN, C.J.--The above reference under Section 66 (2) of the Income-tax Act, 1922 (hereinafter referred to as the Act) raised the following questions:- "Whether on the facts and in the circumstances of the case, there was any material before the Income Tax Appellate Tribunal in holding that the loss of Rs,1,51,968 claimed by the assessee was a hedging loss."
2. ' The above reference pertains to the assessment year 1972-73.The admitted position is that the respondent assessee during the assessment year purchased 1,98,882 maunds of cotton for Rs,2,67,94,961, and in relation to the above purchase they claimed loss of Rs,1,151,968 as a hedging loss. However the Income-Tax Officer disallowed the above amount on the ground that the respondent-assessee failed to produce the total break-up of the cotton requirem ment of the year and the production and because of that he held that it was a speculative loss and not hedging loss. The above order of the Income-Tax Officer was maintained by the learned Appellate Assistant Commissioner in appeal. However, the learned Income-Tax Appellate Tribunal on the basis of the past practice has taken the contrary view and has held that since in the past on the basis of the same material the hedging loss was allowed, there was no justification to hold that it was a speculative loss. In our view, the question whether the loss in question was hedging loss or speculative loss, was a question of fact which could have been adjudicated upon by the Income- tax Tribunal and the finding of fact so recorded by the Tribunal cannot be reversed in this reference. Mr.Khalid Anwar, learned counsel for the respondent/assessee, has referred to the case of Commissioner of Income-Tax, Kerala v. Joseph John reported in 1969 PTD 816 in which the Iiidian Supreme Court while dealing with the similar situation, held that the question whether the transactions were speculative transactions and not hedging transactions essentially was a question of fact. The above-cited case supports the view which we are inclined to take, therefore, our answer to the question is in the affirmative.
3. ' The reference stands disposed of with no order as to costs.