TMI Blog2013 (4) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment Year 1986-87. The background facts may be noticed, in brief, as follows: The applicant is a registered firm consisting of four partners and is engaged in the business of manufacture and export of carpets. For the Assessment Year 1986-87 the assessee filed a return on 29.7.1986 disclosing a loss of ₹ 75,000/-. In support of this loss, the applicant filed balance sheet and manufacturing details, Trading and Profit and Loss account along with the return of income. In the Profit and Loss account, the applicant, inter alia, debited a sum of ₹ 1,20,000/- as business loss. The Assessing Officer made an assessment under Section 143(1)of the Income-tax Act, 1961, hereinafter referred to as the Act , accepting the loss of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness expenditure. The explanation of the assessee was as under:- That regarding our claim of ₹ 1,20,000 paid as composition money under FERA the same has been honestly and properly treated as an expenditure incurred for the purpose of business and which resulted bona fide in the course of business. It cannot be said to be or characterised to have been sustained by a conduct contumacious or unlawful for two reasons:- (a) The assessee had been carrying on the business regularly, inter alia, with M/s. Gertued Set West Germany and, as such, could not have anticipated any foul play on their part. It had sent several consignments till 31.3.1980 and had a sum of ₹ 4,58,996.21 as business debt over them. (b) Out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of the Reference on merits. Heard Sri R.K. Upadhyaya, learned Standing Counsel for the Department. It was not disputed by Sri R.K. Upadhyaya, learned Standing Counsel for the Department, that the assessee had claimed certain amounts as business loss and the said amount was disclosed in the Profit and Loss Account. However, according to the Department, as the assesee had wrongly claimed the payment for violation of FERA as business loss, on this ground it was inferred that the assessee has concealed its income. We find that in view of the Apex Court decision in the case of CIT vs. Reliance Petroproducts Pvt. Ltd., (2010) 322 ITR 158 and a recent decision in the case of Price Waterhouse Coopers Pvt. Ltd. vs. Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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