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TMI Blog2024 (1) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal discloses that the departmental representative did not make any submission in that regard. Given this position, we are of the view that since the findings of fact have been returned by the Tribunal that what was destroyed in the fire were goods in which the respondent/assessee was trading, the loss suffered was a revenue loss and hence deductible. Tribunal, therefore, came to a correct conclusion that the addition made by the AO was not sustainable. No substantial question of law arises for our consideration. - HON'BLE MR. JUSTICE RAJIV SHAKDHER AND HON'BLE MR. JUSTICE GIRISH KATHPALIA For the Appellant Through: Mr Sanjeev Menon, Standing Counsel for Mr Zoheb Hossain, Sr Standing Counsel. For the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 to the respondent/assessee under Section 143(2) of the Act. 6.1. The said notice was followed by a questionnaire along with a notice dated 16.08.2017 issued under Section 142(1) of the Act. 6.2. Concededly, the authorized representative of the respondent/assessee attended the hearings and furnished the requisite details and information, pursuant to which, the AO framed an assessment order on 28.12.2017 under Section 143(3) of the Act. 7. As indicated above, Rs. 5,24,06,053/- was added to the income of the respondent/assessee on the ground that it was a contingent loss, since the claim was being processed by the concerned insurance company [i.e., National Insurance Co. Limited]. 8. In an appeal preferred by the respondent/asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad occurred, was a contingent loss. 14. We have carefully perused the record. According to us, the stand taken by Mr Menon is not in consonance with the record. 15. As indicated hereinabove, notices were issued to the respondent/assessee under Section 143(2) and 142(1) of the Act. The notice issued under Section 142(1) of the Act was accompanied by a questionnaire. 16. The appellant/revenue, for some strange reason, has not placed on record either the notice or the questionnaire to indicate whether a question was raised with regard to the fire incident. 17. Furthermore, the record also shows, something which is a part of the assessment order, that at the hearing held by the AO on 06.11.2017, the respondent/assessee was called up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to follow General Accounting principles. 20. Besides, the record also discloses, something which is not disputed by Mr Menon, that a notice under Section 133(6) of the Act was issued to the concerned insurance company, which had responded via reply dated 01.11.2017 indicating that the claim was under process . 21. As would be evident from the record, the AO did not, at any point in time, raise a doubt as to the occurrence of the fire incident. The doubt which the AO entertained was whether the loss constituted an ascertained liability or a contingent loss. 22. The insurance company also, in its reply to the notice issued under Section 133(6) of the Act (which was given nearly three years after the fire incident), did not raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 41(1) of the Act. 25.2. None of the proposed questions were directed towards the fire incident or to that issue had not been decided. 25.3. Furthermore, a perusal of the impugned order passed by the Tribunal discloses that the departmental representative did not make any submission in that regard. 26. Given this position, we are of the view that since the findings of fact have been returned by the Tribunal that what was destroyed in the fire were goods in which the respondent/assessee was trading, the loss suffered was a revenue loss and hence deductible. 27. The Tribunal, therefore, came to a correct conclusion that the addition made by the AO was not sustainable. 28. In our view, no substantial question of law arise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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