2015 (12) TMI 981 - HC - Income Tax

Addition of a loss incurred by the assessee for block assessment - ITAT deleted the addition - Held that - ITAT correctly held that there was no material with the Assessing Officer to disallow the claim of loss claimed by the assessee while filing its regular returns of income, because there being no material evidence found during the search and, therefore, it was beyond the power of the AO to review the position already accepted while passing the assessments u/s 143(3) on the basis of regular returns filed in due course of time. Accordingly, we delete all the additions made by the AO in the block period. - Decided in favour of the Assessee.

Summary

Issues:
1. Appeal under Section 260A of the Income Tax Act, 1961.
2. Deletion of loss incurred by the assessee for the block assessment period.
3. Charging of surcharge.
4. Request for time to produce relevant documents.
5. Unavailability of assessment record.
6. ITAT's decision on disallowance of claim of loss.
7. Existence of relevant record not referred to by ITAT.
8. Questions framed for determination.
9. Conclusion regarding ITAT's order.

Analysis:
The case involves an appeal under Section 260A of the Income Tax Act, 1961, following a previous Supreme Court order. The appeal pertains to the deletion of a loss incurred by the assessee during the block assessment period. The Tribunal had allowed the appeal of the assessee, stating that there was no material to disallow the claimed loss. The Revenue challenged this decision, claiming the existence of relevant records not considered by the Tribunal, specifically referring to Annexures A-35 and A-53. However, despite multiple adjournments, these documents could not be produced, leading to the unavailability of the assessment record.

The Court noted that neither the Assessing Officer nor the CIT had provided material to prove the loss claimed by the assessee was not genuine. The ITAT held that without such evidence, the AO could not disallow the claim of loss. The Court, considering the previous adjournments and the inability to produce the relevant record, concluded that it could not assess the correctness of the ITAT's order without the assessment record. Consequently, the questions framed for determination were answered in favor of the assessee, and the appeal was dismissed.

In summary, the case involved a dispute over the deletion of a loss claimed by the assessee during the block assessment period. The Tribunal had ruled in favor of the assessee due to lack of evidence provided by the Revenue to disallow the claim. The inability to produce crucial documents and the unavailability of the assessment record hindered the Court from making a conclusive decision, leading to the dismissal of the appeal in favor of the assessee.