TMI Blog2004 (1) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, this ground is dismissed. 3. On behalf of the appellant, Mr. Mohandass contended that the assessee is aggrieved with regard to two issues of Rs. 7.5 lakhs and Rs. 3.43 lakhs which were added to the income of the assessee. The first item of Rs. 7.5 lakhs was an advance that was made by the appellant's wife for purchase of a land. It was realised subsequent to the payment that the person who received the amount claiming that he was a power of attorney-holder of the property, was a fraud. It was also reported subsequently that the land which the person had committed to buy for the assessee's wife in fact, belonged to the Government. The assessee had approached the concerned legal authorities and the police for tracking the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated to have been claimed, sufficient evidence is not available. 4. Rival contentions in regard to the above have been carefully considered. The Supreme Court in CIT vs. Piara Singh (1980) 17 CTR (SC) 111 : (1980) 124 ITR 40 (SC) was considering a question of claim of business loss in regard to smuggling contending that the goods, the smuggled items, was confiscated by the customs authorities. The assessee claimed that consequent to confiscation the assessee suffered loss in its illegal business and, therefore, the assessee should be allowed deduction as business loss. The Supreme Court accepted the contention of the assessee. In the case cited by the assessee in Anjani Kumar Co. Ltd. the amount was paid for acquiring land for setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s inserted with a proviso that reads as under: "Provided that the tax chargeable under this section shall be increased by a surcharge, if any, levied by any Central Act and applicable in the assessment year relevant to the previous year in which the search is initiated under s. 132 or the requisition is made under s. 132A." This proviso was inserted by the Finance Act, 2002, indicating that it would be effective from 1st June, 2002. The CIT(A) in his order stated that Finance Act, 2001, levied tax at the rate prescribed in s. 113 as well as surcharge for the asst. yr. 2001-02. He further noted that Finance Act, 2001, applied to income that had arisen during the previous year ending March, 2001. He further stated that since search was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 7.5 lakhs paid towards the purchase of the land. The attempt of the assessee by making the complaints to the police and issuing of power of attorney was in vain and he could not recover the advance paid. Hence, it is the prayer of the assessee that the advanced sum of Rs. 7.5 lakhs be allowed as a loss in the computation of the undisclosed income of the assessee. On appeal, the CIT(A) observed that the assessee advanced the money for the purchase of the land. The advance was given for acquiring a capital asset. The loss if any incurred by the assessee can only be considered as a capital loss and the CIT(A) has distinguished the decision of the Rajasthan High Court in the case of CIT vs. Anjani Kumai Co. Ltd. (2002) 178 CTR (Raj) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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