TMI Blog2018 (5) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no question about the fact that the assessee had not recorded the income received from students despite the same having duly received in the relevant previous year. There is no quarrel therefore so far as the receipt of the sum in question is concerned. Coming to the alleged swindling of its ex-director, we find that the assessee’s claim does not satisfy the basic conditions of a note being put up in the relevant schedule based on a reasonable assumption as per books as held in Chainrup Sampatram vs CIT [1953 (10) TMI 2 - SUPREME Court]. We thus see no reason on facts to interfere with both the lower authorities findings making the impugned addition of ₹ 2,45,00,000/- on account of assessee’s failure in proving that Shri Mitra had swindled cash sum of ₹ 70 lakhs and the other amount of ₹ 1,75,00,000/- (supra). The assessee fails in its latter substantive ground as well. - ITA No.2224/Kol/2016 - - - Dated:- 11-5-2018 - Shri S.S. Godara, JM And Dr.Arjun Lal Saini, AM For The Appellan : Shri T.P.Kar, AR For The Respondent : Shri S.Dasgupta, Addl. CIT, Sr. DR ORDER PER S.S. GODARA, JM: 1. This assessee s appeal for A.Y.2011-12 em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Assessing Officer to come to best judgment assessment in the event of assessee s non compliance of his above notices. We quote this tribunal Third Member decision in [2012 ] 12 TMI 1 in Pragati Engineering Corporation vs ITO considering all the relevant law to affirm both the lower authorities action proceeding u/s 144 of the Act against the assessee therefore. Learned counsel has also quoted many judicial precedents about ambit and the scope of section 144 proceedings in specific circumstances. The same are found to be not applicable in peculiar facts and circumstances before us since the assessee had failed to submit any response on its part in producing the relevant books of account forming foundation of its documents filed before the Assessing Officer who had no other option but to finalise the relevant assessment as per law. We therefore see no reason to accept assessee s instant former substantive ground. The same is accordingly rejected. 4. The assessee s latter substantive ground challenges both the lower authorities action in rejecting its plea that the sum in question of ₹ 2,45,00,000/- stood swindled by its former director Mr. Ashish Mitra between Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y changing opinion or raising debate thereon on changing the method separated from the assessee which are consistently followed by the appellant over the years. This is the view of the Supreme Court in CIT vs A Krishnaswami Mudaliar reported in 53 ITR 122 , 127 In this context the assessing officer has to look to the substance of the situation and decide the matter in such a manner that neither the Revenue is put to unreasonable loss nor is the assessee subjected to hardship. This is the view of the Calcutta High Court in CIT vs. Hazaribag Coal Syndicate (P) Ltd reported in 1771TR 135 139. Your appellant submits that when the appellant could not submit the books of accounts but the audited accounts duly audited and certified by the statutory auditors have been submitted the AO has not rejected those rather accepted and the appellant attended the hearings almost all the days he should pass the order u/s 143(3) and not u/s 144. More-over the Auditors of the company attended before the Assessing Officer in response to the notice of summons u/s 131 to him and he affirmed that the certified accounts are in agreement with the books of accounts as produced. The statement of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka reported in .110 ITR 674 Where held that an ex-parte best judgement assessment u/s 144 can only be made to defaults specified in that section. Non-compliance with a summons requiring production of accounts books and other documents etc is not such a specified default and therefore it cannot result in an ex-parte best judgement assessment. 1.12. The Madras High Court too has decided in J M Shah vs CIT reported in 56 ITR 293 that mere non-production of books without proof of existence of things non-produced would not fall within the mischief of section 144. 1.13. Therefore since the AO is of the revenue minded whatever the additions are made is of the revenue and not of civil judicial authority. Hence the additions be deleted in full. 6.2. I have considered the assessment order as well as the written submission made by the AR of the appellant company. I find that the AO has made out a clear cut finding that the appellant has filed a police complaint against its exdirector Mr. Ashish Mitra. The sum and substance of such complaint was that Mr. Ashish Mitra had siphoned of ₹ 1,75,00,000/- between September 2010 to December 2010 from various bank accounts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to get deduction of the impugned swindling (supra) committed by its ex-director hereinabove. He then invites our attention to the fact that the assessee has initiated criminal complaint as well as civil suit proceedings against its former ex director so as to form sufficient reason for claiming the relief in question. There can be no dispute about legal position settled by various hon ble courts from time to time that a loss having direct nexus with carrying out of business activities is allowable u/s 28 r.w.s. 37 of the Act. The dispute in the instant case arises because of the relevant facts involved. The assessee fails to rebut both the lower authorities findings that all its documents filed during the course of scrutiny comprising of balance sheet, profit and loss account, Tax audit report (supra) do not contain even a note that there has been any swindling of funds on part of its ex-director (supra). Nor the alleged complaint as well as civil proceedings form part of case record before us. Coupled with this, the Assessing Officer had granted it sufficient opportunity to cross examine Shri Ashish Mitra. Nobody turned up at assessee s behest to avail the same. Its auditor has al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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