TaxTMI 
TaxTMI 
2016 (4) TMI 79
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....ver, set aside u/s 263 of the Act. The A.O. was directed to make fresh assessment on the issue of claim of loss of Rs. 13,14,612.91 incurred by the assessee firm, on trading in certain commodities like paddy, cotton etc. through the following concerns. S.No. Name of the firm Loss (in Rs.) 1. M/s Garg Enterprises 7,42,631.78 2. M/s Chandu Lal Mohan Lal 1,50,506.00 3. M/s Sita Ram Sher Singh 1,85,233.08 4. M/s Mahalaxmi Cotton P.Ltd. 1,99,038.74 5. M/s Radha Kishan Brikhbhan 67,203.00 Total: Rs. 13,44,612.91 The A.O. completed the assessment u/s 143(3) r.w.s. 263 of the Act on 25.3.2003 determining the total income at Rs. 14,32,410/-. 2.1. On appeal the Ld.CIT(A), Muzaffarnagar granted relief only to the extent of Rs. 67,203/- being loss suffered from trading of cotton bales with M/s Radha Kishan Brikbhan. The balance addition was confirmed. Aggrieved the assessee filed the present appeal before me. 3. I have heard Shri SVM Chaurasia, the Ld.Counsel for the assessee and Shri T.Vasanthan, Ld.Sr.D.R. on behalf of the Revenue. On a careful consideration of the facts and circumstances of the case, pe....
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....ave been incurred are not properly shown in balance sheet and also address not mentioned in audit report. As per certificate of Excise and Taxation Officer, Ward 2. Bhatinda dated 27-1-2003. it is clear that during the FY 1996-97 firm was in existence and if expenses are not debited properly no inference can be drawn that the firm was not in existence. 4. Production of books Same were in the possession of Sh Prahlad Singh Prop of the firm and address being available on the file, the Ld AO was requested that Sh Prahlad Singh be summoned. A request was also made by Sh Surender Kumar Joshi in his written submissions copy filed. 5. Cancellation of Registration by Excise & Taxation Officer on 4-6-1997 During FY 1996-97 registration was in existence is evident from the letter itself. / 6. Name and address of purchaser and sellers not stated in the statement These details can be submitted from the books of accounts which are in the possession of Sh Prahlad Singh. Proprietor of the firm which may please be summoned or time be allowed to us for producing the books. 6.2. The asessee had produced the following documents before the A.O. as....
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....ccount books were not produced either by M/s Chandu Lal Mohan Lal or M/s Ram Kumar Vijendra Kumar on the common ground that they have been lost. 7.2. The assessee submitted as follows. (i) Shri Som Prakash Prop M/s. Chandu lal Mohan Lal in his statement recorded on 29-1-2003 (que no. 20) admitted that draft was received from the assessee firm which was deposited in the bank. The assessee firm has obtained copy of the bank account of M/s. Chandu Lal Mohan Lal from UCO Bank bearing account no. 892 wherein the draft of Rs. 150,506/- was credited on 19-3-1997. It is therefore, clear that the statement of Sh Som Prakash recorded on 29-1-2003 wherein he has stated that he has no other bank account except ale no. 600079 opened on 10-4-1998 was not correct and might have been given under some confusion. (ii) The statement of Sh Devi Dayal, Partner of M/s. Panmeshwari Das Ghanshyam Das that he never saw Sh Som Prakash or heard his name is not acceptable as he was not a partner in the said firm during the period relevant to the AY 1997-98. Moreover, M/s. Panmeshwari Das Ghanshyam Das has filed copy of account of M/s. Chandu Lal Mohan Lal wherein sales made to the firm by....
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....f voucher issued by Sh Ram Kumar Virendra Kumar to M/s. Chandu Lal Mohan Lal 20. Copy of accounts of M/s. Chandu Lal Mohan Lal in the books of MI5. Panmeshwari Dass Ghanshyam Dass and other papers supporting of entries in the copy of accounts 21. Copy of sales bill issued by M/s. Chandu Lal Mohan Lal to M/s. Panmeshwari Dass Ghanshyam Dass in respect of 1088 bags amounting to Rs. 6,52,148/-. 7.4. On perusal of the same, I am of the considered opinion that the loss of Rs. 1,50,506.00 has to be allowed, as the assessee has demonstrated the genuineness of the same. 8. Loss of Rs. 1,85,233.08 in the case of M/s Sita Ram Sher Singh; and Loss in the case of M/s Mahalaxmi Cotton P.Ltd. of Rs. 1,99,038.74:- 8.1. The A.O. disallowed the above loss on the following grounds. i. M/s. Sita Ram Sher Singh purchased cotton bales on 21-3-1997 for Rs. 11,94,363.60 and sold on 24-3-1997 for Rs. 10,09,029.52 to sister concern M/s. Mahalaxmi Cotton Pvt Ltd. ii. On 21-3-1997 only a sum of Rs. 3,439.70 was the credit balance in the bank of M/s. Sita Ram Sher Singh. This small amount in the bank account could not have satisfied the purchase of Rs. 11,94,363.60....
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....es as amount deposited in bank is to be withdrawn from bank as no interest is received in current account. v. Sh Shiv Kumar, is Partner in M/s. Sita Ram Sher Singh and Director in M/s. Mahalaxmi Cotton Pvt Ltd. He along with books of account appeared before the le! AO and requested that books be examined but the Ld AO denied to examine on the following grounds: a. In the statement recorded by Income Tax Inspector on 4-3-2001 it was stated that account books have been lost. b. That summon sent by Ld AO has not been complied with. c. That books which were to be produced might have been fabricated. In this regard it is submitted that books stated to be lost/misplaced in 2001 were available in 2003 and if summon were not complied the onus was shifted on the assessee to produce both the parties so appellant tried and requested both the parties hence they were present on the request of the assessee as a witness of the assessee. Refusal of Ld AO to entertain both the parties is against the law and principle of natural justice and so addition made by the Ld AO is not maintainable. He has not even scrutinized the details submitted by assessee. Durin....