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2021 (10) TMI 154 - AT - Income TaxAssessment u/s 153A - Search proceedings u/s 132 - HELD THAT:- Since in this case search has taken place u/s 132, preceding six year assessments preceding from the date of search i.e. 29.04.2015 are to be done u/s 153A and accordingly assessment for A.Y. 2013-14 was also made u/s 143(3) / 153A. Therefore, we do not find merit in this contention for Ld. Counsel for the assessee. However, whether there was incriminating material found in respect of each of additions / disallowances made in the assessment order as per the arguments raised by Ld. Counsel may be relevant and we would consider this argument while discussing and adjudicating the grounds of appeal involving various additions / disallowances. Loss claimed by the assessee did not relate / accrue for the year under consideration - whether such loss is the loss of the year under appeal or not? - HELD THAT:- The impugned loss which is the subject matter of the present appeal is integral to the main business of the assessee andhas been incurred in respect of the contracts entered into to safeguard the foreign exchange proceeds on export or foreign exchange payments in respect of the imports and other payables from exchange fluctuation loss and is thus not speculative loss but is normal business loss which is liable to be set off as per the provisions of the Income Tax Act. Since the agreement came to an end in Jan 2013 and March 2013 and agreed level could not be achieved and hence, as per the agreement the loss had crystallized on the expiry of the period of 5 years which fell in the year before us and hence the loss booked by the assessee is the loss of the year under appeal. Merely because the loss has got some connection with earlier year(s), it does not make the loss as the loss of those years. All that has to be seen the precise point of crystallization of the event leading to the loss which in our considered opinion fell in the year before us and hence the loss is the loss of the year under appeal. As CIT vs. West Chusick Coal Co. Ltd. [1980 (9) TMI 65 - CALCUTTA HIGH COURT], Metal Box Co of India Ltd. vs. Their workmen [1968 (8) TMI 53 - SUPREME COURT] which lay down the guiding principles as to when a loss can be said to have been incurred. Thus, even on this score the loss which is the subject matter of appeal before us is the loss which is allowable in the previous year relevant to AY 2013-14. - Decided against revenue. Bogus expenses claimed to be incurred by the assessee company on account of job work done - HELD THAT:- Contention of CIT (A) that evidence filed by the assessee selfserving documents and circumstantial evidence leads to the conclusion of A.O. that Sh. Mohinder Kumar Garg was an old employee of the assessee company cannot take the case of revenue anywhere. It would be enough for us to say that voluminous documentary evidences filed by the assessee& considered by us are clearly establishing the genuineness of the job work expenses incurred in relation to M/s Sai Exports - For direct documentary evidences, how can the so called circumstantial evidences be relied. Documentary evidences filed by the assessee before the lower authorities which have been referred by CIT(A) at page 60 of his appeal order to which reference has also been made in the written submissions filed by the assessee and to which our attention was drawn clearly establish & mentioned by us above that job work expense claimed by the assessee to have been paid to M/s Sai Exports are quite genuine and established. Non genuine purchases of fabric - HELD THAT:- We do not want to burden our order by repeating the whole hosts of documentary evidences filed in this case which establish that the purchases made by the assessee from the above said two suppliers are genuine purchases. We have gone through the observations made by CIT(A) in his appeal order and we do not agree with them. Opening of the bank account by the suppliers in the same bank in which assessee had bank account is not something which is unusual as it may be necessary for the smoothness of the banking and avoid the loss of time in collecting the cheques etc. We find that the burden to prove purchases was very well discharged by the assessee - Decided in favour of assessee. Addition u/s 14A - Extent of exempt income - HELD THAT:- In any case, there is exempt income only to the extent of ₹ 85,656/-and for this reason also, disallowance under section 14A could not have exceeded this amount in view of the decision of Delhi High Court in the case of Joint Investment Ltd [2015 (3) TMI 155 - DELHI HIGH COURT]hence we uphold the order of CIT(A) to this extent. But, Since we have deleted the entire amount of disallowance made by AO, hence even the disallowance sustained by CIT(A) to the extent of ₹ 85,656/- is also not sustainable. In the result, ground no. 14 of the assessee’s appeal is allowed.
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