COMMISSIONER OF INCOME TAX vs S. N. A. S. A. ANNAMALAI CHETTIAR

The Supreme Court held that the loss incurred by the assessee due to bombing in Malaya during World War II was an allowable deduction under Section 10(1) of the Indian Income Tax Act, 1922. The Court reasoned that since the assessee was actively engaged in business in a war zone, the loss was incidental to the business operations. The Court rejected the department's contention that the loss was not a business loss, affirming the principle that losses incurred in the course of business, even under extraordinary circumstances, should be deductible.