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TMI Blog2019 (11) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... rmal course of its business of export was not to be allowed while computing its income for the year under consideration. We thus not being able to persuade ourselves to subscribe to the view taken by the lower authorities, therein set aside the order of the CIT(A) and delete the additions/disallowance made by the A.O. - Decided in favour of assessee. - ITA No.1753/Mum/2017 (Assessment Year: 2010-11) - - - Dated:- 22-10-2019 - Shri Ravish Sood, Judicial Member And Shri N.K. Pradhan, Accountant Member Appellant by: Shri Rakesh Joshi, A.R Respondent by: Shri Amit Pratap Singh, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-50, Mumbai, dated 09.12.2016, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short Act ), dated 28.03.2013 for A.Y. 2010-11. The assessee has assailed the impugned order on the following grounds of appeal: 1. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D 1000 (approx) per MT to USD 300 (approx) per MT during the period viz. August, 2008 to September, 2008. It was submitted by the assessee, that under the aforesaid circumstances M/s Ammetal FZCO, UAE had declined to accept the material at the price at which it was billed to it. In order to substantiate its aforesaid claim, the assessee had furnished the photocopies of its correspondence with M/s Ammetal FZCO, UAE. Apart therefrom, it was submitted by the assessee, that it also had various telephonic communications with M/s Ammetal FZCO, UAE for settlement of dispute. However, as all efforts of the assessee to persuade the importer to settle the dispute had gone in vain and the latter had outrightly declined to accept the goods, therefore, it was finally compelled to accept the rejection of goods. In the backdrop of the worldwide fall in prices of steel and its alloys, it was submitted by the assessee, that it was also not commercially viable on its part to lift the goods from Dubai and bring back the same to India. Also, it was the claim of the assessee, that as the assessee had exported the goods without a letter of credit facility, therefore, it was also conversant of the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5486405, dated 29.09.2008 was also filed with the A.O. Copy of the letter dated 13.12.2013 of the RBI issued to the assesses bank i.e Bank of India, Branch: Mandvi, Mumbai, permitting the writing off the unrealised export sale proceeds of USD 436,194.81, in respect of the aforesaid goods exported by the assessee to M/s Ammetal FZCO, UAE was also furnished with the A.O. However, the A.O was not persuaded to accept the aforesaid claim of loss of the assessee for multiple reasons viz. (i), that, the correspondence and the joint declaration of the assessee and M/s Ammetal FZCO, Dubai, did not reveal the nature of dispute; (ii) that, the copies of the correspondence between the assessee and its importer was not authenticated by a third party; (iii) that, no reason was discernible from the correspondence between the assessee and M/s Ammetal FZCO for rejection of goods; (iv) that, M/s Ammetal FZCO despite having rejected the goods had sold them in the local market and also exported part of the same; (v) that, no supporting documents evidencing the realisation of sale proceeds were furnished by the assessee; (vi) that, the returned goods had not been included by the assessee in its clo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot agree to accept the goods. Under the aforesaid circumstances, as submitted by the ld. A.R, the assessee being left with no other alternative and also being conversant of the fact that the price of steel had witnessed a crash worldwide, therefore, negotiated with the importer for selling the goods at the best possible price in Dubai. It was submitted by the ld. A.R, that the assessee while taking the aforesaid decision was also not oblivious of the fact that it would not be commercially viable for it to lift the goods from Dubai and bring back the same to India. In order to verify the aforesaid factual position, the ld. A.R took us through the correspondence between the assessee and the aforesaid importer viz. M/s Ammetal FZCO, UAE. It was submitted by the ld. A.R, that M/s Ammetal FZCO, UAE had thereafter with the consent of the assessee sold the material and after reducing its cost of selling and import expenses, therein remitted the balance amount of AED 349354 equivalent to USD 95145.11 @ USD 184 to the assessee. Our attention was drawn to the copy of the correspondence of the assessee and also the complete details of the selling and import expenses, after deducting which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods on 16.10.2008 to M/s Ammetal FZCO, UAE. As is discernible from the export documents, the assessee had exported the goods on DA 90 days basis. Assessee had duly accounted for the exports sales of ₹ 2,56,10,584/- on 16.10.2008 in its books of accounts for the immediately preceding year i.e Financial year 2008-09. As observed by us hereinabove, it is the claim of the assessee that post 2008 worldwide economic crisis the price of steel had sharply crashed, as a result of which, there was a substantial decline of demand for all variants of steel and its alloys in the global market. Resultantly, during the period falling between August, 2008 to September 2008, the price of steel had witnessed a sharp decline from USD 1000 per MT (approx.) to USD 300-350 (approx) per MT, which position continued as such till middle of the year 2009. We find substance in the aforesaid claim of the assessee, which is supported by him on the basis of the LME Steel Billet Price Graph extracted from London Metal Exchange (LME) website. We have perused the correspondence of the assessee with its importer viz. M/s Ammetal FZCO, UAE, and find that the latter had declined to accept the goods exported b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s emerging from the aforesaid documents. Apart therefrom, we find, that the assessee had applied to its bank i.e Bank of India, Branch, Mandvi for writing off the balance amount of export sale proceeds amounting to USD 4,36,194.81 which had become irrecoverable under the aforesaid circumstances. Also, we have perused the correspondence between the assesses bank i.e Bank of India,Branch: Mandvi, and the Reserve Bank of India, Mumbai, wherein the bankers had sought the approval of RBI for allowing writing off the unrealised export bill amount of USD 436,194.81 [i.e invoice amount USD 531339.92 (minus) amount received USD 95,145.11] in respect of the aforesaid export transaction of the assessee with its importer viz. M/s Ammetal FZCO, UAE. As is discernible from the records, RBI, Mumbai, vide its letter dated 13.12.2013 addressed to the Asst. General Manager Bank of India, Branch: Mandvi (i.e the assesses bank) had agreed to the request of the assessee for allowing write off of the unrealised export bill amount of USD 436,194.81. In the backdrop of the aforesaid facts, we are of the considered view, that now when the authenticity of the claim of the assessee that it had suffered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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