TMI Blog1997 (5) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... higher price. The Assessing Officer, therefore, considered it fair and reasonable to disallow the claim of loss. 3. In first appeal it was contended that the assessee genuinely incurred the loss on sale of Car as it met with an accident and became defective and was giving low mileage. The A/C was not convinced with the arguments put forward and agreed with the Assessing Officer. 4. In this appeal, the AR of the assessee reiterated the same arguments which were advanced before the A/C. The DR was also heard who relied on the orders of both the lower authorities. We are inclined to agree with the lower tax authorities that it is highly incredible that Contessa Car of a very Premier company being in good demand on account of its elegant look and appearance was sold for a sum of Rs. 55,000 in a short period of 12 months. The assessee has not been able to lead any evidence that the car met with an accident and on that account it fetched a less sale price. By this statement of the assessee, it is obvious that the real sale price of the Car was not Rs. 55,000 but something more. It is a common knowledge that Ranchi, a small place of Bihar does not contain a very organised market in au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the expenditure claimed towards supervisory charges cannot be allowed in law. We affirm the conclusion of the A/C in this regard. 8. We have heard both sides in respect of the 3rd ground regarding the addition of Rs. 5,038 being expenditure towards purchases relating to earlier years. We find that the assessee has no case at all to get any relief from us in this second appeal. The expenditure related to the earlier year and it cannot be allowed in the year under appeal. The addition was rightly confirmed by the A/C. No interference is called for. 9. In the result, the appeal is dismissed. Per Shri V.K. Sinha, A.M. ---There are three disputes in the assessee's appeal numbered as (a),(b) and (c) in the 1st para of the proposed order of my ld. Brother. I agree with the conclusions with regard to the disputes at (b) and (c). However, with due respect and after thorough consideration, I am unable to agree with the conclusions at (a), i.e., the confirmation of the disallowance of loss in sale of car, amounting to Rs. 18,093. The facts have been stated in the proposed order of my ld. Brother, I may add that in the assessment order, the Assessing Officer observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act to be invoked, the decision of the Hon'ble Supreme Court will apply with even greater force. I, therefore, hold, with respect, that the onus was on the Department to show that consideration higher than what was recorded in the books was actually received. This onus has not been discharged by the Department. It is not proper to put a negative onus on the assessee to prove that the assessee did not receive a sum larger than what was recorded in the books. 3. For the above reasons, the disallowance of loss in sale of car, amounting to Rs. 18,093 is deleted. STATEMENT FOR THIRD MEMBER REFERENCE AS PER SUB-SECTION (4) OF SECTION 255 OF THE I.T. ACT, 1961 As we have differed in our views in the above-mentioned I.T. Appeal, we refer the below given point for the consideration of Third Member as provided in sub-section (4) of section 255 of the Act and request the Hon'ble President accordingly : Point for Reference : (1) Whether, in the facts and circumstances of the case, the disallowance of loss on sale of car, amounting to Rs. 18,093 should be confirmed or deleted ? THIRD MEMBER ORDER Under sub-section (4) of section 255 of the Income-tax Act, 1961 (hereinafter re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss of Rs. 18,093 claimed by the assessee on this account." 6. As pointed out by the learned Judicial Member, the originator of the Tribunal's order, during first appeal it was contended on behalf of the assessee that they actually incurred the loss in this transaction as the vehicle had met an accident, became defective and started giving low mileage. However, this argument did not find favour with the learned CIT(A) who held that the Assessing Officer was quite fair and reasonable while estimating the approximate sale price of the car and disallowing the loss claimed by the assessee. 7. Before the Tribunal the stand taken by the assessee was reiterated. The learned Judicial Member upheld the departmental stand that it was highly incredible that the vehicle in question which came from a very premier company in good demand on account of its elegant look and appearance was sold for a sum of Rs. 55,000 within a short period of 12 months. Further the assessee has not been able to lead any evidence that the car met with an accident and on that account, it fetched a lesser sale price. With reference to a decision of the Apex Court in the case of Durga prasad More the learned Judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a negative onus on the assessee to prove that the assessee did not receive a sum larger than what was recorded in the books', the learned Accountant Member deleted the disallowance of Rs. 18,093 leading to the present dissent. 9. As is obvious, the learned D.R. representing the department has canvassed the view taken by the learned Judicial Member. 10. On a very careful consideration of the entire gamut of facts and the submissions made by the learned D.R. and also carefully examining the plea consistently taken by the assessee before the lower authorities, I am of the view that the loss of Rs. 18,093 is not allowable to the assessee. My reasons for saving so are these 11. While there is no dispute that an assessment cannot proceed on the strength of doubts and suspicions which in law are not equivalent to proof, one cannot resist the temptation of getting stuck for a moment when told that a vehicle of a premier brand viz.; Contessa purchased by an assessee for an amount of Rs. 91,367 was sold for as low an amount as Rs. 55,000 within an year's time. Surely such a stand cannot be seconded by any one without the impulse of making a question mark. One may or may not get an an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an accident, it becoming defective and consequently giving low mileage impelling the assessee to get rid of the car constitute a special fact which being if not within the exclusive but special knowledge of the assessee ought to have been proved by them. This onus cast on the assessee has not been discharged. It is not as if the Assessing Officer tried to put a negative onus on the assessee to prove that they did not receive a sum larger than what was recorded in the books. Let us not miss the wood for the trees. The pith and substance of the matter manifestly is that the onus of proving the involvement of the vehicle in an accident, so that it commanded a lesser price was not discharged by the assessee even minimally or in a prima facie manner. The proposition advanced by the appellant-firm, therefore, cannot commend itself to any one. The ratio of Raman's case, supra, is quite distinguishable. It is in this case that their Lordships while defining the jurisdiction of all Assessing officer in the matter of reopening of an assessment with particular reference to the existence of reason to believe that income had escaped assessment held that avoidance of tax liability by so arrangin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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