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TMI Blog2015 (9) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... eration the basic issue which has been raised is as under: "Whether the Tribunal after upholding the contention of the Appellant that the orders of the Assessing Officer & Commissioner of Income Tax (Appeals)[CIT(A)] were passed in breach of the natural justice in the absence of the cross examination, is correct in sustaining the orders on the basis of other circumstances?" 3. The Appellant is a partnership firm, engaged in trading in items like raw wool, synthetic waste and acrylic fiber. For the subject Assessment Year, the Respondent-Assessee filed its return of income, declaring a loss of Rs. 58.81 lakhs. During the course of the assessment proceedings, the Assessing Officer observed that the Respondent-Assessee had claimed a loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a sister concern of the Respondent-Assessee Canon Steels Pvt. Ltd. to conclude that there was no crash in the market, warranting a loss. The Assessing Officer also noted the fact that it was the Assessee's case that it was in the business of selling raw wool in retail. This would requires workers to make small lots of 60 to 70 kg of raw wool. However, this was also not found believable as no amount on account of salary to employees and labour charges etc was debited to the Profit & Loss Account. 5. The Assessing Officer, thus concluded not only on the basis of the statements made by the three individuals to whom the Commission was issued but also on the basis of examination of other evidence that the loss claimed was not genuine. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance of loss by the lower authority could be sustained even after ignoring the statements of persons who were not offered for the cross examination. The impugned order found that both the Assessing Officer and the CIT(A) had on the basis of other evidences and surrounding circumstances as set out above, concluded that loss claimed, was not genuine. The impugned order also relied upon the dictum set out by the Apex Court in CIT v/s. Durga Prasad More 82 ITR 540 and Sumati Dayal v/s. CIT 214 ITR 801 that taxing authorities are entitled to look at the surrounding circumstances to find out the reality of the affairs on the test of human probabilities (de hors the evidence recorded on commission). This is so, as observed by the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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