9911796707
TMI Blog2022 (3) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... addition has been made on account of trading transaction of Palmolein Oil. It is relevant to mention that in the A.Y. 2013-14 though in assessee's case the addition was made on the same issue of an amount of ₹ 39,89,762/- taking the base of A.Y. 2010-11 which under consideration before us the Ld. CIT(A) in that A.Y. 2013-14 by and under the order dated 25.01.2017 has accepted the said Palmolein Oil business as a genuine one and only confirmed an addition of ₹ 2,00,000/- on ad-hoc basis. We do not justify the observation made by the Ld. AO in holding the transaction ingenuine and further holding that the loss incurred by the appellant is not a genuine loss and thereby making addition considering the purchase cost paid ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 and duly served upon the assessee followed by detailed questionnaire on 24.0.2012. 5. The brief facts leading to the case is this that upon examination of the books of accounts it is found that there is a drop in the Gross Profit Ratio due to huge loss incurred by the assessee in the trading of Palmolein Oil. The assessee entered into contract with broker to purchase specified quantity of Palmolein Oil at a specified rate and the delivery to be taken to within a specified time period too. Accordingly, whenever the assessee failed to purchase the product within the specific period the assessee had to purchase Palmolein Oil from broker at the rate prevailing on the date of entering into contract. The Ld. AO observed that the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate prevailing on the date of purchase. 8. It is a fact that it is a commitment of the appellant to purchase specified quantity for the assessee, at specified rates and delivery to be taken within a specified time period. As per accounting principle when the actual liability takes place it is to be accounted on the date of actual purchase/sales and the same is constantly done by the appellant. Therefore, it is a rate of delivery as per the contract price which is applicable and not the spot rate on the date of delivery; as the letter ignores the fundamentals of future contracts as prevalent to the impugned trade of the appellant. 9. It appears that the Ld. AO has made the addition holding the transaction as non-genuine whereas w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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