MADNANI DEVELOPMENT CORPN. (P) LTD. vs COMMISSIONER OF INCOME-TAX, ORISSA

The Supreme Court held that the loss of Rs.30,045 claimed by the assessee, a contractor, was a capital loss and not a revenue loss, as the land was not part of its stock-in-trade but was acquired for obtaining earth to fulfill a contract. The Court emphasized that the land was treated as a fixed asset in the balance sheet and that the nature of the loss did not qualify for deduction under the Income Tax Act. The High Court's decision was upheld, confirming that the loss was capital in nature and thus not deductible.