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TMI Blog2018 (6) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in confirming the validity of the order passed u/s 143(3) r.w.s 147 of the Act. The Hon'ble CIT(A) has not appreciated the provisions of Section 147 of the Act and has confirmed the proceedings u/s 147 of the Act by ignoring the fact that for the year under consideration no income was escaped or understated. Hence the order passed by Hon C1T(A) is unjust and uncalled for and the same be quashed. 2. The Hon'ble CIT(A) has erred in confirming the disallowance of Embezzlement loss of Rs.1,49,42,167/- made on substantive basis by ignoring the facts that the assessee has never claimed the loss in accounts nor while filing return of Income. It be noted that the Hon CIT(A) has not appreciated the facts and the submission made by the Assessee and confirmed the said addition. Hence the addition made on protective basis be deleted. 3. The Hon'ble CIT(A)-4, has erred in confirming the charging of interest u/s 234A/B/C of the Act. Your Appellant submits that charging of interest is incorrect and unjustified. It be held so now and the same be directed to be deleted. Your appellant craves for to leave add/alter/amend any grounds of Appeal before hearing of this Appeal." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant vide his order dated 19.09.2013 in Appeal No. CAB-VI/205/2012-13 as under:- 5.3 I have given my careful consideration to the facts of the case, the submissions of the appellant, judicial pronouncements and the material available on record. The issue relates to sale of milk by the appellant, which was not accounted for by certain units of the appellant and no realization, as per appellant was made from this sale. There is no dispute on the fact that the issue does not relate to the year under consideration but relates to F.Y. 08-09 relevant to A.Y. 09-10. The appellant reiterates that on the insistence of the Government Auditor, the sale was accounted for in F.Y. 09-10 relevant to A.Y. 10-11. However, the appellant further states that it did not debit the amount j of such sale in the Profit and Loss account as the Government Auditor insisted that it should be recovered from the concerned employees and should be shown, for the time being, as "recoverable" in the Balance Sheet. It is clear that the appellant has not let go of its claim on the sale price. It is also not disputed that the matter is still being investigated. It is also beyond dispute that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- cannot be accepted. When sales are accounted for, as a corollary, loss, if any, should be a/lowed to be written off, when the loss crystallized. Since it has not crystallised during the year under consideration, it cannot be allowed as deduction during the year under consideration. In view of this, the order of the Assessing Officer in this regard is confirmed. The appellant fails on these two grounds of appeal." Facts of the preset case are not different from the facts of A.Y.2010-11 when the matter was decided against the assessee. Thus, I have no reason to differ from my predecessor and following his order, dismiss the sole ground of appeal." Being aggrieved by order of learned CIT(A) assessee is in appeal before us. The learned AR at the outset brought our notice that the appeal filed before the Hon'ble ITAT pertaining to the A.Y. 2010-11 has been dismissed by vide order dated 13 April 2018. Thus, the addition made for Rs. 1,49,42,167/- was confirmed in the year 2010-11 on a substantive basis. Therefore, if the addition is further made in the year under consideration, then it will lead to double addition in the hands of the assessee, which is contrary to the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther contends that such alleged loss cannot be recognized in the absence of any legal action initiated against the unscrupulous employees. Thirdly, the assessee has admittedly recorded the unaccounted sales relevant to Financial Year (FY) 2008-09 as recorded by the assessee in FY 2009-10 (AY 2010-11 in question) on detection of error by the audit party. The assessee having recognized the sale and corresponding debt outstanding to be recovered from the employees so indulged probable impropriety, there is no scope for claiming business loss in such circumstance. 12.3. Notwithstanding the merit in the plea of the assessee that the book entry is not necessarily required to be passed in the Profit & Loss account for the purposes of claim of deduction, we simultaneously observe that the narrative given on behalf of the assessee towards embezzlement of loss is not supported by any cogent evidence. The correctness of the version of the assessee that misappropriation/embezzlement of sale proceeds has irretrievably happened is not corroborated by action taken by the assessee thus far. The assessee has neither recognized the sale proceeds as not recoverable nor has initiated any criminal a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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