BURMAH SHELL OIL STORAGE & DISTRIBUTING CO. OF INDIA LTD. vs C.I.T.

The Supreme Court addressed the appeal concerning the disallowance of a loss claimed by the Burmah Shell Oil Storage and Distribution Company under Rule 5 of the Income Tax Rules, 1962, and Section 32(1)(iii) of the Income Tax Act, 1961. The Court held that the loss of Rs 27,43,807 from the sale of returnable gas cylinders was allowable as revenue expenditure, affirming the Income Tax Appellate Tribunal's decision. The ruling clarified that the loss on returnable packages could be recognized even when the packages were sold in good condition, thus establishing a precedent for similar claims in the future.