TMI Blog2015 (10) TMI 2117X X X X Extracts X X X X X X X X Extracts X X X X ..... ises caused by heavy rains on 8th July, 2009, the assessee filed affidavits and police complaint and copy of newspaper report. The Assessing Officer did not make verification of any of these documents, but disbelieved the same without bringing anything contrary on record. With regard to justification of the loss, the assessee had submitted evidences showing that the rate of Nickel (the main ingredient of non ferrous metal traded by the assessee), crashed consistently throughout the year and came down from ₹ 30,000/-per M.T. in April 2008 to ₹ 9,000/- per M.T. in March 2009, registering steep fall of more than 70%. The assessee had filed evidences in the form of quotations from London Metal Exchange, in support of his assertion. It was submitted that most of the sales have been shown by assessee out of the opening stock held, and all the purchases were made in the earlier years at higher rate prevailing at that time. Due to the aforesaid steep fall of more than 70% in the rate of goods traded by the assessee, gross loss was incurred by the assessee. The documentary evidences submitted, the details of which have been reproduced in this order above, would show that on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loss of ₹ 18,74,33,043/- as shown by the assessee in the return of income filed. During course of hearing, ld. Sr. D.R. appearing on behalf of Revenue has argued that during course of assessment proceeding, the assessee failed to produce the books of account and therefore, the Assessing Officer consulted the past history of the assessee and estimated the GP at ₹ 1,40,57,727/-, after deducting the expenditure shown by the assessee in its books of accounts at ₹ 82,62,461/-, the net profit of assessee was estimated at ₹ 57,95,266/-. The books of accounts were not produced by the assessee, therefore, the Assessing Officer had no option but to estimate the profit. It was argued by the ld. D.R. that CIT(A) has erred in reversing the order of the Assessing Officer and therefore, the addition made by Assessing Officer should be upheld and action of ld. CIT(A) should be reversed. 4. On the other hand, ld. Counsel for the assessee submitted that Assessing Officer was highly unjustified in estimating the income of the assessee. It was submitted by the ld. Counsel that due to heavy rains in Mumbai, there was flooding in the office of the assessee, which is locat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the Assessing Officer estimated net profit of the assessee based upon GP rate of previous two years. It has been noted by us that books of accounts of the assessee are audited by the tax auditors. These audited accounts along with tax audit report was available before the Assessing Officer. The assessee submitted before the Assessing Officer that due to flooding caused by heavy rains, various records were destroyed and therefore, with a view to enable the Assessing Officer to make verification of the return filed by the assessee, the assessee collected various evidences from its suppliers and submitted the same to the Assessing Officer along with various accounts generated on the computer systems. It is noted from the records shown to us that assessee had submitted following details and documentary evidences before the Assessing Officer: Sr. No. Particulars of Documents enclosed Page No. 1. Copy of letter dated 26th December 2011 filed before ld. A.O. with the following documents:- i) Affidavit of assessee dated 16/07/2009 for destruction of physical accounting records due to he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of the parties concerned i.e. name, complete address, PAN etc. The assessee also filed detailed note of justification for the loss suffered in business by the assessee during the year under appeal along with corroborative evidences and also citing the comparable case of other assessees having similar business and having suffered similar losses in the same year. In support of its claim of destruction of records due to water loging in the business premises caused by heavy rains on 8th July, 2009, the assessee filed affidavits and police complaint and copy of newspaper report. The Assessing Officer did not make verification of any of these documents, but disbelieved the same without bringing anything contrary on record. With regard to justification of the loss, the assessee had submitted evidences showing that the rate of Nickel (the main ingredient of non ferrous metal traded by the assessee), crashed consistently throughout the year and came down from ₹ 30,000/-per M.T. in April 2008 to ₹ 9,000/- per M.T. in March 2009, registering steep fall of more than 70%. The assessee had filed evidences in the form of quotations from London Metal Exchange, in support o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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