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TMI Blog2022 (7) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... r this disputed liability after settlement. Considering the evidences before it Ld. CIT(A) had found the findings of ld. AO based on surmises or suspicion alone and same require no interference. The ground no 1 is disallowed. Addition on account of loss claimed in trading in foreign exchange - assessee could not establish the genuineness thereof with evidence without giving any appropriate facts - CIT-A deleted the addition - HELD THAT:- As finding of Ld AO that these investment were beyond ordinary business of Company is not correct. Further the time stamped contract notes of the authorized brokers operating through recognized stock exchange alongwith unique client code substantiate the claim of assessee that the transactions were gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference . Assessee claimed that certain expenditures likely to be incurred for a removal of high tension electric wire were likely to be incurred, therefore a provision was created in the books of account by debiting the proposed expenditure to Profit Loss account. However, Ld. AO was not satisfied and considered it to be an unascertained liability. The Ld. AO believed that assessee should have created this provision in its balance sheet. Further even after 3 years no such compensation has been paid to anybody, therefore, this amount was disallowed. Further, in regard to an amount of Rs. 4,82,15,440/- booked under the head Loss in Currency F O as a part of the Revenue from operation was disallowed as Ld. AO considered forward tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pects of the nature of business of the assessee while making the additions. It was submitted that the compensation provision was not based on any agreement and the liability was unascertained. It was submitted that the currency loss in derivatives was beyond the ordinary course of business and that as a matter of fact, no prudent person would continue to make losses by such investments which were beyond the ordinary course of business. 6. On the other hand, Ld. Counsel for the assessee defended the orders of Ld. CIT(A). It was submitted that the liability was based on an expected expenditure. It was submitted that there was dispute with regard to amount which had to be paid and finally after a settlement, sum of Rs. 1,51,00,000/- was pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company at page no 145 of PB, clause number B(14) and at page no 146 of the PB clause C(3) establish that establish that Assessee company had incorporated in its MOA that it may make investment as its business. So the finding of Ld AO that these investment were beyond ordinary business of Company is not correct. Further the time stamped contract notes of the authorized brokers operating through recognized stock exchange alongwith unique client code substantiate the claim of assessee that the transactions were genuine and ld. CIT(A) has rightly considered the same. Merely by introducing the rule of human prudence that no person would continue to make loss on day to day basis the documents reflecting the transactions cannot be alleged to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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