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2015 (9) TMI 1185 - HC - Income TaxEstimation of income - genuineness of fall in price / loss - AO relied upon various surrounding circumstances such as sales made by a sister concern of the Respondent-Assessee Canon Steels Pvt. Ltd. to conclude that there was no crash in the market, warranting a loss - Breach of the natural justice - Whether the Tribunal after upholding the contention of the Appellant that the orders of the Assessing Officer & Commissioner of Income Tax (Appeals) were passed in breach of the natural justice in the absence of the cross examination, is correct in sustaining the orders on the basis of other circumstances? Held that:-Tribunal by the impugned order accepted the Respondent's appeal before it to the extent the order of the Assessing Officer and the CIT(A) placed reliance upon the statements of the three persons made to the Commissionerate at Ludhiana without being available for cross examination. This was not permissible as being in breach of natural justice. However, after holding the above, the impugned order proceeds to consider the other evidence on record to examine whether or not the disallowance of loss by the lower authority could be sustained even after ignoring the statements of persons who were not offered for the cross examination. The impugned order found that both the Assessing Officer and the CIT(A) had on the basis of other evidences and surrounding circumstances as set out above, concluded that loss claimed, was not genuine. The impugned order also relied upon the dictum set out by the Apex Court in CIT v/s. Durga Prasad More [1971 (8) TMI 17 - SUPREME Court ] and Sumati Dayal v/s. CIT [1995 (3) TMI 3 - SUPREME Court ] that taxing authorities are entitled to look at the surrounding circumstances to find out the reality of the affairs on the test of human probabilities (de hors the evidence recorded on commission). This is so, as observed by the Apex Court "apparent being not real." In the circumstances, it concluded that the loss was not genuine. The finding of fact recorded by the impugned order is not shown to be perverse and/or arbitrary. It is a possible view in the context of facts arising in this case for consideration. Thus, the question as proposed for our consideration does not give rise to any substantial question of law. Accordingly, we see no reason to entertain the present Appeal.
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