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2015 (4) TMI 680 - KARNATAKA HIGH COURTBid-loss - Claim of business loss - Whether the Tribunal was correct in holding that a sum of ₹ 7,20,32,155/- should be allowed as a bid loss since the assessee was following Completed Contract Method of accounting without considering the nature of loss on account of which the Assessing Officer and the Appellate Commissioner had disallowed the claim? - Held that:- All that the assessee did was, filed a written submission on 03.02.2006 stating that as the tickets have been bid at the early stage of the duration of respective chit groups, when there will be high competition, the assessee has been foregoing a higher amount of bid loss. This is due to the principle of the discounted auction flow where one has to forego a higher rate of discount and obtain a specified amount of money rather than at a later date. In other words, the assessee was explaining the principle followed by them, which results in bid loss. What the Assessing Authority wanted was to give evidence that the assessee actually incurred the said loss in following the said principle, which was not furnished. Therefore he disallowed the said bid loss. Therefore, the Tribunal was not justified in setting aside the well considered order passed by the First Appellate Authority. In that view of the matter, the impugned order cannot be sustained. However, if the assessee is able to substantiate the said claim by producing acceptable evidence, in law the assessee would be entitled to the benefit of deduction. - Matter remanded to the Assessing Authority to decide the claim of business loss claimed by the assessee. - Decided in favor of revenue.
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