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2023 (7) TMI 128 - AT - Income TaxDisallowance of loss on Cut and Polished Diamonds on the ground that qualitative details were not furnished by the assessee - HELD THAT:- As decided in Khandwala Gems Trading Corporation [1995 (5) TMI 80 - ITAT JAIPUR] in case of precious stones the sales value will undoubtedly differ from quality to quality, but in such cases, each stone is of different quality and its value is so subjective that it may be valued differently by different valuers. Hence, in such cases, unless there is strong evidence to hold otherwise, the sales as shown have to be accepted when quantitatively there is no discrepancy. As regards non-production of parties, it is not a sufficient ground to draw an adverse inference, particularly when the addresses given by the assessee tallied with those available with the bankers of those parties and with the sales-tax authorities. It would be too much to expect the assessee to do anything more in case of its customers. With regard to AO's contention that sales to these three parties have been made at lower prices, it is a mere statement of opinion by the AO not supported by any direct or indirect evidence. Also not in dispute that the sales made by the assessee were through banking channels. Thus AO cannot disallow the claim of loss, when the Assessing officer has not pointed out any specific defect or short comings on the trading transactions. D.R. appearing for the Revenue could not place on record any contra view against the findings of the Ld. CIT(A). Thus the ground raised by the Revenue is devoid of merits and the same is liable to be rejected. Loss on sale of Gold bar - AO held that the sale rate on a particular date was Rs. 1520/- per gram whereas market rate was Rs. 1590 per gram - HELD THAT:- As seen from the assessment order, the market rate of Rs. 1590/- arrived by the A.O. were not supported by any credible evidence. Inquiries conducted by the A.O. by summoning purchasers by issuing notice u/s. 133(6) also has not given any untoward inferences. The AO has also not confronted the market price at 1590/- with any evidences to the assessee but however adopted this figure and disallowed Rs. 12,00,380/- on sale of Gold bar. In the case of CIT Vs. Sham Lal [1980 (4) TMI 69 - PUNJAB AND HARYANA HIGH COURT] held that the Revenue is not entitled to place reliance on the material which was brought on record behind back of the assessee. Any material placed on record without notice to the assessee cannot be relied upon by the Revenue. D.R. could not place before the appellate authorities, the market value as adopted by the Assessing Officer. Thus the ground raised by the Revenue is devoid of merits and the same is liable to be dismissed. Losses in respect of 22 carat Gold Ornaments sold by the assessee - A.O. has not made out a case that the sales are to the related persons only. Here also, the A.O. merely on doubts and suspicions made the disallowance, which in our considered view is not correct in law. The above findings of our is supported by case of Kamlesh Jhaveri [2017 (1) TMI 1759 - ITAT AHMEDABAD] wherein after considering the various judgments of the Hon’ble High Courts held that the losses claimed by the assessee are genuine and cannot be termed as colourable with the intention to evasion of tax. Disallowances made by AO on claim of losses are devoid of merits - Decided in favour of assessee. Addition u/s 68 - unsecured loans and interest payment thereon - HELD THAT:- Revenue could not produce before us any contra findings arrived by the Ld. CIT(A). The Ld. D.R. could not deny the TDS on the interest paid by the assessee to the creditors. Further the above unsecured loans have been repaid in the subsequent assessment years and copies of the contra accounts placed which is also not disputed by the Ld. D.R. As relying on AYACHI CHANDRASHEKHAR NARSANGJI [2013 (12) TMI 372 - GUJARAT HIGH COURT] and RANCHHOD JIVABHAI NAKHAVA [2012 (5) TMI 186 - GUJARAT HIGH COURT] additions made u/s. 68 and consequential interest expenses are hereby deleted.- Decided in favour of assessee.
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