TaxTMI 
TaxTMI 
2012 (2) TMI 134
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....t of Rs.11,79,797/-. 2. The assessee in the present case is an individual who filed his return of income for the year under consideration on 24-07-2001 declaring total income of Rs.1,91,620/-. The said income was mainly comprising of income from brokerage/commission and interest income. From the information received in the form of a copy of Police complaint lodged by the assessee against Shri H.K. Jain, Proprietor M/s Alpha Export, it was revealed to the AO that the assessee was a dealer in diamond and had sold and delivered cut and polished diamond worth Rs.15,16,616/- to Shri H.K. Jain on 10-06-2000. It was also revealed that against the said sale of diamond, the assessee had received a sum of Rs.15 lakhs by cheque from Shri H.K. Jain.....
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....e value of diamonds. It was contended that there was, however, neither the purchase nor the sale of diamonds during the year under consideration since there was no approval or confirmation received from M/s Alpha Exports. It was contended that no entry in the books of account for the transaction in diamonds, therefore, was made and there was no question of disclosing or declaring any income arising from trading in diamond since there was neither the purchase nor the sale of diamond made in the year under consideration. The AO did not find merit in these contentions raised on behalf of the assessee and treating the entire sales value of diamond amounting to Rs.15,16,616/- as unaccounted income of the assessee, he added the said amount to the....
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....at the appellant had received the diamonds from M/s White diamonds on approval and had forwarded the same to M/s Alpha Exports against a cheque of Rs.15 lakhs as part payment towards the total value of the diamonds given to M/s Alpha Exports at Rs.15,16,616/-. In the instant case before me, although the Appellant has not provided a copy of the Jhangad receipt which would have substantiated his claim that the diamonds were given on approval, but it is a fact that the Appellant had issued a Bill No.L/JUNE/1/2000-2001 dated 10-6- 2000 to M/s Alpha Exports and in lieu of the same has also received substantial payment i.e. Rs.15 lakhs against Rs.15,16,616/- as stated in the bill. This is also evidenced by a bill in an earlier transaction issu....
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....he year under consideration as per the practice normally followed in diamond trade. We are unable to agree with this contention of the learned counsel for the assessee. In his petition filed in Girgaon Court, Mumbai u/s 138 of the Negotiable Instrument Act, it was categorically stated by the assessee that cut and polished diamonds worth Rs. 15,16,616/- were sold and delivered to M/s Alpha Exports in the course of regular business vide Bill No. L/JUNE/1/2000-2001 dated 10-6-2000. Moreover, a cheque of Rs.15 lakhs was received by the assessee from M/s Alpha Exports against the supply of diamonds and the same was not only deposited by the assessee in his bank account, but efforts were also made to recover the sum of Rs.15 lakhs by initiating p....
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....oks of account. Consequently, the said party was not treated as debtor by the assessee in his books of account and there was no occasion or question to write off the said debt as irrecoverable in the books of account of the assessee which is a condition precedent for claiming deduction on account of bad debts. Even the claim of the assessee for allowing the amount in question as business loss cannot be accepted because for allowing any amount as business loss, the loss should be suffered by the assessee in the relevant year. In the present case, the assessee was claiming the amount in question from M/s Alpha Exports by initiating the proceedings u/s 138 of the Negotiable Instrument Act which was pending before the Court of Special Metropoli....