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TMI Blog2014 (7) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. (C) The lower authorities erred in failing to appreciate that the appellant has sufficiently and substantially reconciled the AIR information and they ought not to have made/confirmed any addition for alleged purchases. 2. LOSS OF TRADING STOCK DUE TO FIRE: (A) On the facts and circumstances of the case and in law, the ld. CIT(A) erred in rejecting the claim of the appellant for deduction for business loss of trading stock of Rs. 12,66,898/- destroyed in fire in appellant's hotel during the relevant previous year. (B) On the facts and circumstances of the case and in law, the ld. CIT(A) erred in not directing the Assessing Officer to allow deduction for the above business loss for which full details were made available in the return of total income and during assessment proceedings. He further erred in not appreciating that the loss in relation to stock-in-trade is an allowable business deduction." 2. The brief facts qua the issue raised in ground No.1(A) and 1(B) are that, the assessee is engaged in the business of running hotel and related activities. It had one hotel at Juhu, Mumbai and second hotel at Goa. The Assessing Officer had received AIR information that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making such an addition. It was also submitted that assessee's GP ratio on sale of F&B for the year under appeal was at 75.25% as compared to the earlier year at 74.51%. 4. The ld. CIT(A) rejected the assessee's contention on the ground that, once the department has definite information, then onus was on the assessee to get the confirmation from the aforesaid parties, which was done. Having not discharged the burden to prove that it had not made purchases, the assessee's ground on this score was dismissed. 5. Before us, the ld. counsel for the assessee submitted that, once the assessee categorically denied of making any purchase from the said party, then onus was upon the department to show that the AIR information is correct and is also corroborated by cogent material on record. In any case, he submitted that the assessee had pursued the matter with the M/s. Mansha Agencies Private Limited later on, who had directly sent confirmation letter to the Assessing Officer vide letter dated 12.04.2014 wherein they have categorically admitted that no supply of liquor was made to the assessee for Juhu hotel and there was some kind of mix-up at their end. Therefore, assessee's contention n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n received by the department vide letter dated 12.04.14. Since this confirmation was not available with the Assessing Officer as well as ld. CIT(A), therefore in the interest of justice, we admit this additional ground and remit the matter back to the file of the Assessing Officer to verify the said confirmation letter and accordingly decide the issue as raised in ground No.1(A). 8. As regards the addition of Rs. 92,161/- which is on account of alleged difference in liquor purchase, we agree with the contention of the ld. counsel that, once the assessee has reconciled all the purchases recorded in the books of account from the bills, then for making further addition the Assessing Officer should have made out a preliminary inquiry from the vendors about the quantity of sale made by them to the assessee. On this score also we feel that in the interest of justice, the matter should be restored back to the file of the Assessing Officer who shall carry out necessary inquiry or verification from the vendors from whom the assessee had made purchases and accordingly decide the same after giving an opportunity of hearing to the assessee. 9. In the result, ground No.1(A) and ground No.1(B) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Goetz (India) Ltd. reported in (2006) 284 ITR 323. 12. Before us, the ld. counsel submitted that the loss on account of stock-intrade is always on the Revenue's account which has to be allowed as deduction while computing the profits under section 28 of the Act. The assessee had furnished all the necessary evidences with regard to the actual loss before the Assessing Officer as well as before the ld. CIT(A) which has not been disputed. Further, it has also been brought on record that the assessee had offered the insurance claim in the next year as taxable income and therefore, such a disallowance of loss in this year will amount to double taxation. As regards the finding of the ld. CIT(A) that such a claim cannot be made before the ld. CIT(A), he submitted that the decision of the Hon'ble Supreme Court in the case of M/s. Goetz (India) Ltd. (supra) does not apply on the claim made before the ld. CIT(A) or the Tribunal. This has been clarified by umpteen number of decisions by the various courts. Thus, assessee's claim for loss on account of loss of stock-in-trade of Rs. 12,66,898/- should be allowed as business deduction. 13. On the other hand, the ld. D.R. has strongly reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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