2012 (11) TMI 665

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..... common grounds of appeal.   1. The order of the ld. CIT (A) is erroneous both on facts and in law. 2. The ld. CIT (A) erred in confirming the action of the AO in initiating action u/s 153-A. 3. The ld. CIT (A) erred in confirming that the loss of Rs.77,50,000 on sale of Bonds is capital loss and not business loss in spite of giving a finding that the assessee is compelled to accept bonds in lieu of contract receipt. 4. The ld. CIT (A) erred in not dealing with the submissions of the assessee that the issue whether the loss on sale of investments is business loss or capital loss was considered in the assessment originally made u/s 143(3) and as such the AO is not correct in once again going into such issue without there being any m .....

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..... ,471 as loss on sale of investment and added back the same to the income. The AO came to a conclusion that the loss on sale of investment/asset is a capital loss and the same is not an allowable deduction. He therefore disallowed the differential amount of Rs.77,50,000/- as a capital loss and added it to the total income. The assessee being aggrieved filed an appeal before the CIT (A). Before the CIT (A), the assessee challenging the validity of assessment u/s 153A contended that there being no seized incriminating material as a result of search, the assessment proceedings initiated u/s 153A is not valid in law. In support of such contention, the assessee relied upon a decision of Gujarat High Court in the case of Vijaybhai N. Chandrani vs. .....

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..... hand, strongly supported the orders passed by the revenue authorities and justified the addition made in the assessment order passed u/s 153A of the Act. 7. We have heard rival submissions and perused the materials on record. It is seen from the facts available on record that during the relevant financial year, the assessee had executed contract work pertaining to the irrigation department of Government of Maharashtra. Though the Bonds were issued towards contract receipts, the assessee had shown the Bonds as investment in the balance-sheet. In course of regular assessment u/s 143(3) the AO had also asked the assessee to explain the allowability of the loss claimed of Rs.77,50,000/-. The AO ultimately completed the assessment u/s 143(3) .....

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