9911796707
TMI Blog2019 (11) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred in not considering the alternate plea of the appellant that the claim of loss of Rs. 2,23,07,062/-is otherwise allowable as bad debts, without considering the facts and circumstances of the case. 3. The appellant craves leave to add, amend, alter or delete the said ground of appeal." 2. Briefly stated, the assessee company which is engaged in the business of import and export of iron and steel, lighting products etc. had filed its return of income for A.Y. 2010-11 on 15.10.2010, declaring its total income at Rs. 17,84,45,960/-. Return of income filed by the assessee was processed as such under Sec.143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec.143(2). 3. During the course of the assessment proceedings it was inter alia observed by the A.O, that the assessee had claimed a loss of Rs. 2,23,07,082/- due to rejection of goods in its 'Profit and loss account'. On being queried, it was submitted by the assessee that the loss has emanated from the rejection of 515.864 MT of Hot rolled Steel Wire Rods that were exported by it in the immediately preceding year to M/s Ammetal FZCO, UAE. It was the claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid circumstances M/s Ammetal FZCO, UAE had sold the material at the best possible prices with the approval of the assessee for a consideration of AED 753859 (UAE currency) i.e equivalent to USD 205159 @ USD 397.99. After reducing its cost of selling and import expenses M/s Ammetal FZCO, UAE had remitted the balance amount of AED 349354 i.e equivalent to USD 95145.11 @ USD 184 to the assessee. In order to fortify its aforesaid claim, the assessee had placed on record the photocopies of its correspondence with M/s Ammetal FZCO, along with a summary of the local transactions and the related expenses which were incurred by the latter in order to facilitate the sale of goods as per the instructions of the assessee. On the basis of the aforesaid facts, it was the claim of the assessee, that being faced by the aforesaid compelling circumstances it had however managed to recover the gross price as per the rates as were prevailing in the global market as per LME Steel Billet price graph. On the basis of the aforesaid facts, it was submitted by the assessee, that the sale of the goods at a substantially lower price due the rejection of the same by the importer had resulted to a loss of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 034/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) after deliberating on the issue under consideration was not persuaded to subscribe to the claim of the assessee, and upheld the view taken by the A.O in context of the issue under consideration. 5. Being aggrieved with the order of the CIT(A), the assessee has carried the matter in appeal before us. The ld. Authorized Representative (for short 'A.R') for the assessee at the very outset of the hearing of the appeal took us through the facts of the case. It was averred by the ld. A.R, that the assessee in the immediately preceding year i.e A.Y. 2008-09 had imported 2985.975 MTS of Hot rolled Steel Wire rods from M/s Cargill International Trading Pte Ltd., China. Out of the aforesaid, it had exported 515.864 MTS of Hot rolled Steel Wire rods to M/s Ammetal FZCO, UAE, on 16.102008. It was submitted by the ld. A.R that on the earlier occasions also the assessee had carried out export to the aforesaid concern viz. M/s Ammetal FZCO, UAE, and the latter had duly honoured the transaction and remitted the exports sale proceeds. It was submitted by the ld. A.R, that post 2008 worldwide ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance amount due from the aforesaid importer viz. M/s Ammetal FZCO, UAE. Further, it was submitted by the ld. A.R, that the assesses bank had thereafter sought the approval of the Reserve Bank of India for "writing off" the aforesaid balance amount of sale consideration. It was submitted by the ld. A.R, that the Reserve Bank of India, vide its letter dated 13.12.2013, had after necessary deliberations agreed to the request of the assessee for "writing off" the unrealised export bill amount of USD 436,194.81 in respect of the aforesaid export transaction of the assessee with M/s Ammetal FZCO, UAE. In order to substantiate its aforesaid claim, the ld. A.R had drawn our attention to the correspondence of the assesses bank i.e Bank of India, Branch : Mandvi with RBI. Also, the ld. A.R had taken us through the letter dated 13.12.2013, on the basis of which the assessee was allowed to "write off" the unrealised export sale proceeds amounting to USD 436,194.81. In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that though the loss suffered by the assessee from the aforesaid export transaction was irrefutably proved to the hilt by the assessee on the basis of the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee; and (iv) that their customers had declined to accept the goods. Also, we find, that as is discernible from the correspondence, though the assessee had tried its level best to settle the dispute, however, all its efforts had gone in vain. As the importer had in clear and unequivocal terms declined to accept the goods, therefore, under the aforesaid compelling circumstances the assessee had yielded to the offer of the importer viz. M/s Ammetal FZCO, UAE, which had vide its letter dated 13.05.2009 (Page 54 of APB) agreed to sell the material at the best possible price in Dubai. As can be gathered from the records, the assessee being left with no choice, and also not being oblivious of the fact that it was not commercially viable to lift the goods from Dubai and bring back the same to India, therefore, accepted the proposal of the importer, who had agreed to sell the said products in Dubai after deducting the expenses (on actual basis) which would be incurred for facilitating the sale transactions. It is in the backdrop of the aforesaid facts, we find that the assessee as a prudent businessman had to bear the loss in the normal course on its business in respect of the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee was not to be accepted, for the reason, that the correspondence and the joint declaration filed by them did not inspire much confidence, we are afraid, the same does not find favour with us. Not only the documentary evidence furnished by the assessee to substantiate its claim of loss suffered in the course of the aforesaid export transaction had been proved beyond doubt, but also the fact that the "writing off" the unrealised export sale proceeds amounting to USD 436,194.81 had been allowed by the RBI, further fortifies its aforesaid claim. Also, we are unable to persuade ourselves to subscribe to the view taken by the lower authorities, that as the documents filed by the assessee are not authenticated by a third party, therefore, the same do not inspire much of confidence. In our considered view, the aforesaid reasoning of the A.O is devoid of any force and thus cannot be accepted. In fact, it is not a case that the revenue had placed on record any irrefutable documentary evidence which would dislodge the authenticity of the aforesaid claim of the assessee. As regards the observations of the A.O, that now when the goods exported to M/s Ammetal FZCO, UAE were reje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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