9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 128 - AT - Income TaxDisallowance of loss on Cut and Polished Diamonds on the ground that qualitative details were not furnished by the assessee - HELD THAT - As decided in Khandwala Gems Trading Corporation 1995 (5) TMI 80 - ITAT JAIPUR in case of precious stones the sales value will undoubtedly differ from quality to quality, but in such cases, each stone is of different quality and its value is so subjective that it may be valued differently by different valuers. Hence, in such cases, unless there is strong evidence to hold otherwise, the sales as shown have to be accepted when quantitatively there is no discrepancy. As regards non-production of parties, it is not a sufficient ground to draw an adverse inference, particularly when the addresses given by the assessee tallied with those available with the bankers of those parties and with the sales-tax authorities. It would be too much to expect the assessee to do anything more in case of its customers. With regard to AO's contention that sales to these three parties have been made at lower prices, it is a mere statement of opinion by the AO not supported by any direct or indirect evidence. Also not in dispute that the sales made by the assessee were through banking channels. Thus AO cannot disallow the claim of loss, when the Assessing officer has not pointed out any specific defect or short comings on the trading transactions. D.R. appearing for the Revenue could not place on record any contra view against the findings of the Ld. CIT(A). Thus the ground raised by the Revenue is devoid of merits and the same is liable to be rejected. Loss on sale of Gold bar - AO held that the sale rate on a particular date was Rs. 1520/- per gram whereas market rate was Rs. 1590 per gram - HELD THAT - As seen from the assessment order, the market rate of Rs. 1590/- arrived by the A.O. were not supported by any credible evidence. Inquiries conducted by the A.O. by summoning purchasers by issuing notice u/s. 133(6) also has not given any untoward inferences. The AO has also not confronted the market price at 1590/- with any evidences to the assessee but however adopted this figure and disallowed Rs. 12,00,380/- on sale of Gold bar. In the case of CIT Vs. Sham Lal 1980 (4) TMI 69 - PUNJAB AND HARYANA HIGH COURT held that the Revenue is not entitled to place reliance on the material which was brought on record behind back of the assessee. Any material placed on record without notice to the assessee cannot be relied upon by the Revenue. D.R. could not place before the appellate authorities, the market value as adopted by the Assessing Officer. Thus the ground raised by the Revenue is devoid of merits and the same is liable to be dismissed. Losses in respect of 22 carat Gold Ornaments sold by the assessee - A.O. has not made out a case that the sales are to the related persons only. Here also, the A.O. merely on doubts and suspicions made the disallowance, which in our considered view is not correct in law. The above findings of our is supported by case of Kamlesh Jhaveri 2017 (1) TMI 1759 - ITAT AHMEDABAD wherein after considering the various judgments of the Hon ble High Courts held that the losses claimed by the assessee are genuine and cannot be termed as colourable with the intention to evasion of tax. Disallowances made by AO on claim of losses are devoid of merits - Decided in favour of assessee. Addition u/s 68 - unsecured loans and interest payment thereon - HELD THAT - Revenue could not produce before us any contra findings arrived by the Ld. CIT(A). The Ld. D.R. could not deny the TDS on the interest paid by the assessee to the creditors. Further the above unsecured loans have been repaid in the subsequent assessment years and copies of the contra accounts placed which is also not disputed by the Ld. D.R. As relying on AYACHI CHANDRASHEKHAR NARSANGJI 2013 (12) TMI 372 - GUJARAT HIGH COURT and RANCHHOD JIVABHAI NAKHAVA 2012 (5) TMI 186 - GUJARAT HIGH COURT additions made u/s. 68 and consequential interest expenses are hereby deleted.- Decided in favour of assessee.
Issues Involved:
1. Disallowance of trading loss. 2. Addition under section 68 of the Income Tax Act. 3. Disallowance of interest expenses. Summary: 1. Disallowance of Trading Loss: The Assessing Officer (AO) disallowed trading losses amounting to Rs. 1,03,07,112/- (Rs. 75,77,155/- on Cut and Polished Diamonds, Rs. 12,00,380/- on 0.995 Gold KG Bar, and Rs. 15,29,577/- on 22 Carat Gold Ornaments). The AO's decision was based on the assertion that the assessee did not incur losses on stocks held for a substantial period but claimed losses on sales effected by goods purchased on the same day, involving transactions with related concerns. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted these additions, noting that the AO selectively identified certain transactions and disallowed the losses without disproving the genuineness of the transactions. The CIT(A) observed that the AO failed to provide the basis for the alleged market rates and did not confront the assessee with the information collected. The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO did not point out any specific defects in the trading transactions and that the sales were made through banking channels. 2. Addition under Section 68 of the Income Tax Act: The AO made an addition of Rs. 2,90,00,000/- under section 68, questioning the identity, creditworthiness, and genuineness of unsecured loans taken by the assessee. The CIT(A) deleted this addition after considering additional evidence provided by the assessee, including confirmations, PAN details, bank statements, and the fact that the loans were repaid in subsequent years with appropriate TDS deductions on interest payments. The Tribunal agreed with the CIT(A), noting that the AO did not bring any material evidence to challenge the genuineness of the cash credits and that the burden cast upon the assessee had been duly discharged. 3. Disallowance of Interest Expenses: The AO disallowed interest expenses of Rs. 13,11,396/- on the grounds that the unsecured loans were not genuine. The CIT(A) deleted this disallowance, considering the detailed evidence provided by the assessee, including repayment of loans and TDS deductions on interest payments. The Tribunal upheld the CIT(A)'s decision, finding no infirmity in the order and emphasizing that the AO's approach was not supported by credible evidence. Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s order in favor of the assessee on all grounds, including the genuineness of trading losses, unsecured loans, and interest expenses.
|
