TMI Blog2014 (7) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... o fire – Deduction for business loss of trading stock – Held that:- This is also prima facie borne out from the various evidences placed before us in the paper book - If it is a loss on account of stock-in-trade, then definitely it is on revenue account and has to be allowed as deduction while computing the profits u/s 28 of the Act - a claim cannot be made for the first time before the AO or before the CIT(A), as it tantamounts to revising of the return of income - the assessee has also brought on record that it has received the insurance claim on account of loss due to fire in the subsequent year and the same has been offered for the tax in the AY 2009-10 – the entire issue of claim of deduction of loss should be sent back to the file of the AO for examination of claim – decided in favour of Assessee. - ITA No. 5962/M/2012 - - - Dated:- 11-6-2014 - Shri Sanjay Arora And Shri Amit Shukla,JJ. For the Petitioner : Shri R. C. Jain, A.R. For the Respondent : Shri Maurya Pratap, D.R. ORDER Per Amit Shukla, Judicial Member: This appeal has been preferred by the assessee against impugned order dated 06.07.12 passed by CIT(A)-16, Mumbai for the quantum of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, he held that the sum of ₹ 1,70,719/- is as an unexplained expenditure under section 69C. The Assessing Officer further observed that the assessee had been unable to reconcile the difference of ₹ 92,161/- on account of purchase made from various parties. The assessee submitted that the difference could have been on account of different factors such as inclusion and exclusion of local taxes etc. The Assessing Officer did not accept the assessee s contention and added the said amount to the income of the assessee. 3. Before the ld. CIT(A), the assessee submitted that it had purchased the liquor from many vendors, who collect 1% TCS under section 206 of the Act on the cost of the liquor purchase. These vendors issued certificates for the TCS collected by them on which the assessee is entitled to get credit as prepaid taxes. It was submitted that the assessee s hotel at Juhu was temporarily closed down through out the previous year on account of on going repair and renovation work. Hence, there was no sale of liquor from this hotel and accordingly there was no purchase of any liquor for Juhu hotel. It was further submitted that all the purchases of the liquor and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporated in the books of account. If there was any difference on account of TCS details by the other party, the same should have been inquired by the Assessing Officer from these vendors. Thus, without any contrary material on record, assessee s entry in the books of account cannot be rejected for making the addition. 6. On the other hand, the ld. D.R. strongly relied upon the order of the ld. CIT(A) and submitted that the onus was upon the assessee to show that such a purchase was not made by the vendors. This onus could have been discharged by furnishing the confirmation letters from these parties. Regarding the additional evidence which has been filed by the assessee, he submitted that the same should be verified by the Assessing Officer and therefore, the matter should be restored back to the file of the Assessing Officer. 7. We have heard the rival submissions and also perused the relevant material placed on record. The Assessing Officer has made the addition, mainly on the basis of AIR information received by him that the assessee had purchased liquor worth ₹ 1,70,719/- from M/s. Mansha Agencies Private Limited which is not reflected in the accounts of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like linen,crockery, cutlery, etc. aggregating to ₹ 38,19,687/-. This loss included the loss of ₹ 12,66,898/- on account of loss of operating supplies. This entire loss was added to the total income of the assessee in the computation of income filed along with the return of income. However, during the course of the assessment proceedings, the assessee vide letters dated 20.07.11 and 07.12.11 claimed deduction on account of loss of stock of ₹ 12,66,898/- along with the details of fire and insurance claim before the Assessing Officer. It was also brought to the notice of the Assessing Officer that the insurance claim including the above loss was settled and received in the next year which has been offered for tax in the year 2010-11. However, the Assessing Officer did not give any finding on this score and disallowed the said loss as claimed by the assessee before him. 11. Before the ld. CIT(A), the assessee submitted that, the first appellate authority has the power to entertain such claim and also relied upon various decisions in support of its contention. It was further submitted that the loss was on account of stock-in-trade which is always on the Revenue s a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. In any case, this is also prima facie borne out from the various evidences placed before us in the paper book. If it is a loss on account of stock-in-trade, then definitely it is on revenue account and has to be allowed as deduction while computing the profits under section 28 of the Act. The only ground on which assessee s claim has been rejected by the ld. CIT(A) is that, such a claim cannot be made for the first time before the Assessing Officer or before the ld. CIT(A), as it tantamounts to revising of the return of income. Such a ground is not tenable, as the decision of the Hon ble Supreme Court in the case of M/s. Goetz (India) Ltd. (supra) is only limited to the claim for deduction made before the Assessing Officer by way of a letter. However, it does not impinge upon the power of the ld. CIT(A) to entertain such a claim if all the relevant facts and material have been brought on record. Further, in this case the assessee has also brought on record that it has received the insurance claim on account of loss due to fire in the subsequent year and the same has been offered for the tax in the A.Y.2009-10. Under these facts and circumstances, we are of the firm opinion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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