M/s. MS International Ltd., New Delhi V. Assessing Officer, New Delhi

ITA 205/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69263 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-07-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 14-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Assessee Lawyers: SURESH ANANTHRAMAN
• Keywords: Search and seizure; Additional evidence
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E: NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO: 2 05/DEL/2010 (ASSESSMEN T YEAR: 1996-97) M/S MS INTERNATIONAL LTD. VS. ASSESSING OFFICER 112-A, EKTA ENCLAVE, CIRCLE 6 (1) NEAR PEERA GARHI, NEW DELHI NEW DELHI-110087 (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI SURESH ANANTHRAMAN , CA REVENUE BY : SHRI GUNJAN PRASAD , CIT, (DR) ORDER PER I. C. SUDHIR, JUDICIAL MEMBER: THE ASSESSEE HAS QUESTIONED FIRST APPELLA TE ORDER ON SEVERAL GROUNDS INVOLVING THE SOLE ISSUE AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE PENALTY LEVIED U/S 271 ( 1) (C) OF THE ACT BY THE A.O. ITA NO. 205/DEL/2010 2 2. WE HAVE GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELI ED UPON IN VIEW OF THE ARGUMENTS ADVANCED BY THE PARTIES. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY CLAIMED LOSS OF RS.17,26,45,874/- STATED TO HAVE BEEN CAUSED BY THEFT AT THE FACTORY/GODOWN PREMISES. THE ASSESSING OFFICER DIS ALLOWED THE CLAIMED LOSS IN THE ORDER PASSED U/S 143(2)/263 OF THE ACT. THIS ACTION OF THE AO HAS BEEN UPHELD BY THE LD. CIT (A). THE AO ISSUED SHOW CAUSE NOTICE OF THE PROPOSED IMPOSITION OF PENALTY U/S 271 (1) (C) OF THE ACT ON THE SAID DISALLOWANCE AND BEING NOT SATISFIE D WITH THE EXPLANATION OF THE ASSESSEE HE HAS LEVIED PENALTY O F RS.7,94,17,102/-. THE SAME WAS QUESTIONED BEFORE THE LD. CIT(A) BUT T HE ASSESSEE COULD NOT SUCCEED IN ITS FIRST APPEAL IN THIS REGARD. 4. AT THE OUTSET OF HEARING THE LD. AR POINTED OUT THAT THE ASSESSEE HAS MOVED AN APPLICATION ON 16/5/2011 BEFO RE THE TRIBUNAL WITH PRAYER FOR ADMISSION OF ADDITIONAL EVIDENCE UN DER RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULE, 1963. THE LD . AR SUBMITTED THAT DURING THE COURSE OF BOTH ASSESSMENT AND PENALTY PR OCEEDINGS BEFORE THE AUTHORITIES BELOW, THE APPLICANT WAS NOT HAVING THE NECESSARY DOCUMENTS TO SUBSTANTIATE ITS CLAIM REGARDING THE E LIGIBILITY OF THE CLAIMED ABNORMAL LOSS OF STOCK WORTH RS.17,26,45,874 /-. THE APPLICANT IS A PART OF M.S. GROUP OF COMPANIES AND HAS FACED/WIT NESSED VARIOUS HURDLES SINCE 1995. THE APPLICANT IS THE FIGURE HE AD/PROMOTER OF THESE GROUP COMPANIES. THE APPLICANT COULD NOT FURNISH T HE EVIDENCES, ITA NO. 205/DEL/2010 3 DOCUMENTS ETC. DUE TO ATTENDANT CIRCUMSTANCES WHICH HAVE LED TO DEMOLITION OF FACTORY PREMISES AND THEFT AND DESTRU CTION OF ITS STOCK OF GOODS FROM ITS FACTORY PREMISES. THE STOCK CLAIMED HAVING BEEN FULLY DESTROYED, STOLEN, ETC REPRESENT STOCKS PLACED WITH TWO NATIONALIZED BANKS AND CREDIT FACILITIES HAVE BEEN AVAILED. HE SUBMITTED THAT THE BANKS HAVE CONFIRMED FOR EXTENSION OF CREDIT FACILI TIES TO THE APPLICANT, THEY HAVE TAKEN POSSESSION OF THE SAID STOCKS AND T HE APPLICANT HAS CREATED A PLEDGE OF THESE STOCKS IN FAVOUR OF THE B ANKERS. THE CLAIMED ABNORMAL LOSS HAS RESULTED BECAUSE OF THE DEMOLITIO N OF THE FACTORY PREMISES (WHEREIN THE STOCKS OF GOODS WERE KEPT UND ER PLEDGE WITH THE BANKERS) BY THE CIVIC AUTHORITIES I.E. MUNICIPAL CO RPORATION OF DELHI (MCD). THE APPLICANT THROUGH ITS MAIN PROMOTER MR. PAWAN SACHDEVA VIDE HIS COMMUNICATION DATED 15/11/2010 HAD REQUEST ED THE MCD UNDER RIGHT TO INFORMATION ACT 2005 TO PROVIDE, (I) CERTIFIED COPY OF DEMOLITION NOTICE ISSUED (II) CERTIFIED COPY OF THE ORDER OF DEMOLITION DATE IN RESPECT OF THE STATED PROPERTY, AND (III) N AMES OF OFFICERS PRESENT AT THE CITE WHEN DEMOLITION OR CARRIED OUT. THE MC D VIDE ITS COMMUNICATION DATED 13/12/2010 HAS GIVEN VARIOUS PA RTICULARS WITH REGARD TO THE DEMOLITION OF THE PROPERTY ON 30/1/19 96, WHICH DATE FALLS WITHIN THE ASSESSMENT YEAR 1996-97 UNDER CONSIDERAT ION. THE LD. AR SUBMITTED THAT ONE OF THE BANKERS I.E CANERA BANK, HAS ALSO ISSUED A STOCK STATEMENT WITH REGARD TO THE STOCK PLACED WIT H THEM. THE STOCK OF GOODS LYING IN THE OPEN AFTER DEMOLITION OF PROPERT Y, FROM TIME TO TIME WAS STOLEN BY THE LOCAL MISCREANTS ETC. THE FIR ON THIS ACCOUNT WAS LATER ON LODGED WITH POLICE AUTHORITIES WHEN THE MISCREA NTS WERE CAUGHT BY ITA NO. 205/DEL/2010 4 THE POLICE PERSONNEL AND CASES WERE FRAMED BEFORE T HE LOWER COURT AT TEESHAZARI. THE CHARGE-SHEET FILED AFTER CONSIDERA BLE FOLLOW UP BY THE APPLICANT IS NOW IN POSSESSION OF THE APPLICANT. A LL THESE DOCUMENTS VIZ THE INFORMATION MADE AVAILABLE BY THE MCD WITH REGA RD TO DEMOLITION OF PROPERTY, STOCK STATEMENT OF BANKERS, CHARGE-SHE ET FILED AGAINST THE MISCREANTS, APPLICATION BEFORE THE LD. METROPOLITAN MAGISTRATE, TEESHAZARI, DELHI BY THE BANKERS WERE NEVER AVAILAB LE WITH THE APPLICANT DURING THE COURSE OF QUANTUM PROCEEDINGS AND PENALT Y PROCEEDINGS BEFORE THE AUTHORITIES BELOW. THE LD. AR SUBMITTED THAT BECAUSE OF THE LOSS SITUATION AND THE INELIGIBILITY OF THE APPLICA NT DUE TO BELATED FILING OF APPEAL, THE DISALLOWANCE OF THE LOSS OF RS.17.26 CRORES WAS NEVER BROUGHT BEFORE THE TRIBUNAL. HOWEVER, SAME STOCK L OSS OF RS.17.26 CRORE HAS GIVEN RISE TO LEVY OF PENALTY U/S 271 (1) (C) O F THE ACT. THE LD. AR ACCORDINGLY SUBMITTED THAT ADMISSION OF THE ABOVE S TATED ADDITIONAL EVIDENCES WHICH HAVE BEEN FILED BY WAY OF SEPARATE PAPER BOOK RUNNING FROM PAGE NOS. 42 TO 74 ARE CRUCIAL FOR DECIDING, W HETHER THE APPLICANT HAS MET WITH THE MANDATE OF EXPLANATION 1 TO SECTIO N 271 (1) (C) OF THE ACT. 5. THE LD. DR OPPOSED THE APPLICATION WIT H THE SUBMISSION THAT IT HAS BEEN MOVED AFTER PASSING OF 15 YEARS WHICH FACT CANNOT BE IGNORED. HE SUBMITTED THAT THE APPLICANT COMPANY IS BEING RU N BY SEVERAL PERSONS INCLUDING STAFF. HENCE, IT IS NOT CONVINCI NG THAT THE APPLICANT WAS PREVENTED FROM FILING OF THE DOCUMENTS IN QUEST ION BEFORE THE AUTHORITIES BELOW SINCE THE APPLICANT WAS GOING THR OUGH SOME DIFFICULT ITA NO. 205/DEL/2010 5 TIME. HE DREW OUR ATTENTION TO THE COPIES OF THE D OCUMENTS WHICH THE APPLICANT WANTS TO FILE AS ADDITIONAL EVIDENCE AND TO THE COPIES OF THE DOCUMENTS ALREADY FILED ON EARLIER OCCASION BY THE ASSESSEE WITH THIS CONTENTION THAT DEMOLITION OF THE FACTORY PREMISES WAS AFFECTED ON 30/1/1996 BUT THE FIR TO THE POLICE HAS BEEN LODGED ONLY ON 17/2/1997 WHICH IS PERTAINING TO THE PERIOD RELEVANT FOR THE ASSESSMENT YEAR 1997- 98. HE SUBMITTED FURTHER THAT THERE WAS NO EXTRAOR DINARY CIRCUMSTANCES TO JUSTIFY THE REASONS SHOWN BY THE APPLICANT FOR T HE INORDINATE DELAY IN FILING THESE ADDITIONAL EVIDENCE AT THIS STAGE. 6. CONSIDERING THE ABOVE SUBMISSION WE ARE SATISFIED WITH THAT THERE WAS SUFFICIENT REASON WITH THE APPLICANT WHIC H PREVENTED IT FROM FILING THE EVIDENCE IN QUESTION BEFORE THE AUTHORIT IES BELOW WHICH ARE CRUCIAL FOR THE DISPOSAL OF THE GRIEVANCES OF THE A SSESSEE. THE APPLICANT HAS BEEN ABLE TO DEMONSTRATE THAT IT WAS PREVENTED TO FILE THESE DOCUMENTS BEFORE THE AUTHORITIES BELOW DUE TO SOME EXTRAORDINARY CIRCUMSTANCES WHICH ULTIMATELY LED TO DEMOLITION OF FACTORY PREMISES AND THEFT AND DESTRUCTION OF ITS STOCK OF GOODS FRO M ITS FACTORY PREMISES AND THAT HE WAS MAIN PERSON LOOKING AFTER THE AFFAI RS OF THE COMPANY. BESIDES THESE DOCUMENTS (SHOWN BELOW) ARE COPIES OF INFORMATION, LETTERS, CONFIRMATION ETC ISSUED BY DIFFERENT AUTHO RITIES, COURT AND BANKERS: S.NO. PARTICULARS 8. COPY OF LETTER PLEDGE DATED 30/3/1995 ISSUED BY CANARA BANK, JANPATH, NEW DELHI. ITA NO. 205/DEL/2010 6 9. COPY OF RTI APPLICATION DATED 15/11/2010 FILED W ITH MCD. 10. COPY OF LETTER ISSUED BY MCD DATED 13/12/2010 C ONFIRMING DEMOLITION OF THE GODOWN PREMISES. 11. COPY OF STOCK STATEMENT FILED WITH CANARA BANK DATED 30/6/1996 IN RESPECT OF GOODS HYPOTHECATED STOLEN VALUING RS. 1.70 CRORES. 12. COPY OF CHARGE SHEET FIELD BY POLICE DATED 26/9 /1997 IN RESPECT OF THEFT. 13. COPY OF FIR NO. 122/97 14. COPY OF BAIL BOND OF ONE OF THE ACCUSED-ANIL KU MAR 15. COPY OF APPLICATION DATED 2/2/1999 FILED BY CAN ARA BANK IN THE COURT OF METROPOLITAN MAGISTRATE TEES HAZARI, DELHI 16. COPY OF WARRANT ISSUED AGAINST THE ACCUSED DATE D 10/5/2000 17. COPY OF ORDER DATED 10/8/2000 REGARDING SEIZURE FOR RECOVERY OF VEHICLE 18. COPY OF ORDER DATED 15/11/2010 OF EVIDENCE OF W ITNESS ON 13/4/2011 19. COPY OF ORDER DATED 13/4/2011 ISSUED BY METROPO LITAN MAGISTRATE TEES HAZARI, DELHI 20. NOTE OF ABNORMAL STOCK LOSS. 21. DETAILS OF ABNORMAL STOCK LOSS 7. WE THUS ALLOW THE ADMISSION OF THE ABOVE DOCUMENTS BY WAY OF ADDITIONAL EVIDENCE FOR OUR CONSIDERATION. 8. IN SUPPORT OF THE GROUNDS QUESTIONING THE VALIDITY OF PENALTY LEVIED U/S 271 (1)(C) OF THE ACT AT RS.17,26,45,874/ - , THE LD. AR SUBMITTED THAT THERE WAS DISCLOSURE OF THE CLAIMED LOSS HENCE IT CANNOT BE INFERRED THAT THERE WAS CONCEALMENT OF PARTICULA RS OF INCOME OR ITA NO. 205/DEL/2010 7 FURNISHING INACCURATE PARTICULAR THEREOF ON THE PAR T OF THE ASSESSEE TO ATTRACT THE PENAL PROVISIONS U/S 271 (1) (C) OF THE ACT., HE SUBMITTED THAT THE AUTHORITIES BELOW WHILE IMPOSING AND UPHOL DING THE PENALTY HAVE NOT MADE SPECIFIC ALLEGATION EITHER OF THE TWO I.E CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULAR THEREOF ON THE PART OF THE ASSESSEE TO JUSTIFY THE LEVY OF THE PEN ALTY IN QUESTION. IN THIS REGARD HE PLACED RELIANCE ON THE DECISION OF HONBL E GUJRAT HIGH COURT IN THE CASE OF NEW SAROTHIA ENGINEERING CO. VS. CIT (2006)282 ITR 642 AND OF THE TRIBUNAL IN THE CASE OF CHHAIL BEHARI (2 011) 8/ ITR (TRIB.) 383. HE SUBMITTED THAT THE ASSESSEE WAS IN EXPORT OF LEA THER PRODUCTS AND OTHER GOODS. THE ASSESSEE BELONGS TO M. S GROUP OF COMPANIES, WHEREIN M.S SHOES (EAST) LTD. FLAGSHIP COMPANY OF THE GROUP THE COMPANY WAS A STAR TRADING HOUSE. DURING THE FINAN CIAL YEAR 1994-95 TO EXPAND ITS BUSINESS M. S SHOES BID FOR FIVE STAR S HOTEL PROJECT AND FOUR STARS HOTEL PROJECT WITH HUDCO WHICH WERE ALLO TTED ON 31/10/94 FOR RS.178.1 CRORES, OF WHICH 40% WAS TO BE PAID BY 28/2/1995. THE COMPANY PLANNED A PUBLIC ISSUE OF RS.350 CRORES WHIC H WAS FULLY UNDERWRITTEN. THE PUBLIC ISSUE FAILED ON 15/3/1995 . NOTICES WERE ISSUED ON 15/3/1995 & 24/3/1995 ON UNDERWRITER. TH E UNDERWRITERS DID NOT PAY ON 21/4/1995 BEING THE LAST DATE, AS PE R SEBI GUIDELINES THE AMOUNTS COLLECTED UNDER THE PUBLIC ISSUE WERE REFUN DED. THE COMPANY ISSUED NOTICE TO DELHI STOCK EXCHANGE TO APPOINT AN ARBITRATOR WHICH WAS REFUSED. BANK STARTED ISSUING LEGAL NOTICES FO R REPAYMENT OF LEASE LOANS. ON 4/4/1995 AN FIR NO. R-C 25A/95 WAS REGIST ERED AT BOMBAY BY CBI AGAINST THE COMPANY AND CHAIRMAN-CUM-MANAGIN G DIRECTOR MR. ITA NO. 205/DEL/2010 8 PAWAN SACHDEWA AND THE PREMISES OF THE COMPANY AND RESIDENCE OF MR. PAWAN SACHDEVA AND FAMILY WERE SEARCHED ON 6/4/19 95 AND VARIOUS DOCUMENTS WERE SEIZED. COMPLAINT AGAISNT MR. PAWAN SACHDEVA WAS REGISTERED ON 6/4/1995 AND HE WAS KEPT IN THE CUSTO DY TILL 21/4/1995. HE WAS RELEASED ON BAIL BUT WAS NOT PERMITTED TO TR AVEL. THE EMPLOYEES ALSO LEFT THE ORGANIZATION. THERE WAS NO ONE TO LO OK AFTER DAY TO DAY AFFAIRS OF THE COMPANY. UNDER SUCH CIRCUMSTANCES S TATUTORY DETAILS COULD NOT BE FILED IN TIME AS THE MANAGEMENT WAS PR E-OCCUPIED IN RESOLVING LEGAL DISPUTES. THE BUSINESS OF EXPORT W AS COMPLETELY DISRUPTED DUE TO ARREST AND ILL-HEALTH OF MR. PAWAN SACHDEVA. THE MAIN BUYER AT GERMANY GOT BANKRUPT DUE TO INTERNATIONAL RECESSION IN THE MARKET. IN 1996, COMPANY GAVE LEGAL NOTICES TO THE M TO REALIZE THE MONEY BUT COULD NOT RECOVER ANYTHING. THE COMPANY GOT REGISTERED WITH BIFR IN JUNE 2002. DUE TO THESE FACTS BUSINESS OF THE ASSESSEE WAS ALSO ADVERSELY AFFECTED BEING PART OF THE SAME GROU P. DIFFICULTIES FACED BY M. S. SHOES (EAST RELATED) WITH THE BANK AND CUST OMERS WERE ALSO EXPERIENCED BY THE ASSESSEE. FURTHER DUE TO SEARCH AND SEIZURE AND ARREST OF SHRI PAWAN SACHDEVA BUSINESS WAS COMPLETE LY DISRUPTED. LD. A.R SUBMITTED THAT THESE WERE THE REASONS DUE TO WHI CH THE PROPOSED ADDITIONAL EVIDENCE WERE NOT FURNISHED BEFORE THE A .O DURING THE ASSESSMENT PROCEEDINGS. 9. THE LD. AR SUBMITTED THAT THE ABNORMAL LOSS TO THE TUNE OF RS.17,26,45,874/- WAS CLAIMED. THE LOSS WAS AGREED DUE TO THEFT AT THE FACTORY/GODOWN PREMISES DUE TO DEMOLITION OF THE FA CTORY. ORAL AND ITA NO. 205/DEL/2010 9 WRITTEN SUBMISSIONS WERE MADE ON BEHALF OF THE ASSE SSEE, WHEREIN COPY OF AUDIT ACCOUNTS ALONG WITH THE RETURN WAS FILED. IN THE SAID ACCOUNTS THE ASSESSEE COMPANY HAD MADE A SPECIFIC DISCLOSURE OF THE SAID ABNORMAL LOSS. IN ITS PROFIT AND LOSS ACCOUNT THE ABNORMAL LOSS WAS CLAIMED SEPARATELY AS IT IS EVIDENT FROM PAGE NO-6 OF THE PAPER BOOK A SPECIFIC NOTE WAS INCLUDED IN SCHEDULE H OF AUDIT A CCOUNTS. IN THIS NOTE IT WAS MENTIONED THAT AN AMOUNTS OF RS.1,70,38,500/- WAS WRITTEN OFF ON ACCOUNT OF THEFT WHICH TOOK PLACE AT THE FACTORY/GO DOWN OF THE COMPANY. IT WAS MADE CLEAR THAT THE AMOUNT HAS BEE N VALUED AT COST AND UNQUANTIFIED COST AS PER THE FIRST INFORMATION REPORT LODGED WITH THE POLICE AUTHORITIES. IT WAS FURTHER SUBMITTED THAT AN AMOUNT OF RS.15,56,07,374/- WAS WRITTEN OFF ON ACCOUNT OF DAMA GE WHICH TOOK PLACE AT THE DICHAUN KALAN GODOWN OF THE COMPANY DU E TO DEMOLITION OF BUILDING BY THE MUNICIPAL CORPORATION OF DELHI ( MCD) IN THE ABSENCE OF DIRECTOR OR ANY EMPLOYEE. LD. A.R SUBMITTED THAT THE ASSESSEE HAD THUS EXPLAINED THE CIRCUMSTANCES AND REASONS FOR IN CURRING SUCH ABNORMAL LOSS AND CLAIMED IT BY SPECIFIC DISCLOSURE IN THE PROFIT AND LOSS ACCOUNT. HE SUBMITTED FURTHER THAT COPIES OF FIR AN D OTHER DOCUMENTS WERE FURNISHED BEFORE THE AO DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THE LD. AR ALSO REFERRED PAGE NOS. 1 T O 41 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE WHICH ARE COPI ES OF AUDIT BALANCE SHEET MADE UP TO 31/3/1996, FIR FILED WITH POLICE AU THORITY IN RESPECT OF THEFT OF STOCKS, DETAILS OF ABNORMAL LOSS, FIRST AP PELLATE ORDER IN QUANTUM APPEAL, THE WRITTEN SUBMISSIONS DATED 26/3/2009 FIL ED BEFORE THE A.O AND WRITTEN SUBMISSION FURNISHED BEFORE THE LD. CIT (A) DURING THE ITA NO. 205/DEL/2010 10 PENALTY PROCEEDINGS. THE LD. AR ALSO REFERRED THE D OCUMENTS AS MENTIONED ABOVE FURNISHED BY WAY OF ADDITIONAL EVID ENCE BEFORE THE TRIBUNAL. THE LD. AR ALSO REFERRED THE DECISIONS CI TED BEFORE THE LD. CIT (A) ON BEHALF OF THE ASSESSEE, THESE ARE:- CIT VS TEXTILE & GENERAL TRADING COMPANY 244 ITR 8 76 (DELHI). CIT VS. INTERNATIONAL AUDIO VISUAL COMPANY 288 ITR 5 07 (DELHI) UNION OF INDIA VS. RAJASTHAN SPINNING AND WEAVING MI LLS, 180 TAXMAN 609 (S.C). M/S UNIVERSAL EXPORTS LTD VS. AO, ITA NO- 383/DEL/2 007 10. THE LD. AR SUBMITTED FURTHER TH AT THE ASSESSMENT INITIALLY FRAMED U/S 143 (3) OF THE ACT ALLOWING THE CLAIMED ABNORMAL LOSS WAS SUBJECTED TO REVISION U/S 263 OF THE ACT BY THE LD. CIT. IN COMPLIANCE THE AO IN THE ORDER FRAMED U/S 263/143(3) HAS DISAL LOWED THE CLAIMED ABNORMAL LOSS. HOWEVER, AFTER GIVING EFFECT OF SEC TION 263 ORDER, THE INCOME HAS BEEN ASSESSED AT NIL. IN THIS REGARD HE REFERRED PAGE NO. 30 OF THE PAPER BOOK I.E I.T.N.S- 150. 11. THE LD. D.R ON THE OTHER HAND T RIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSES SEES EXPLANATION REGARDING THE BASIS OF ARRIVING AT THE FIGURE OF LO SS WAS NOT SUBMITTED BEFORE THE AO NOR WAS THERE ANY EXPLANATION IN THIS REGARD AT THE APPELLATE STAGE . THE FIR WAS LODGED ON 17/2/1997 I .E. ALMOST 11 MONTHS AFTER THE CLOSER OF THE RELEVANT FINANCIAL Y EAR. THUS, THE FACTS AS STATED IN THE BELATED FIR COULD NOT BE RELIED UPON D UE TO THE ABNORMAL ITA NO. 205/DEL/2010 11 DELAY IN LODGING THE SAME. THE LD. CIT (A) HAS ALS O UPHELD THE DISALLOWANCE WITH THIS OBSERVATION THAT THE ASSESSE E HAS NOT BEEN ABLE TO GAVE ANY EXPLANATION AS TO WHAT WAS THE BASIS OF CO MPUTING THE FIGURE OF ABNORMAL LOSS. HE PLACED RELIANCE ON THE DECISI ONS FOLLOWED BY THE LD. CIT(A). HE REFERRED EXPLANATION 1 TO SECTION 2 71 (1) (C) OF THE ACT WITH THIS CONTENTION THAT THE ASSESSEE FAILED TO ES TABLISH THE GENUINENESS OF THE CLAIMED ABNORMAL LOSS, HENCE IT WAS CONCEALM ENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THEREO F ON THE PART OF THE ASSESSEE. 12. CONSIDERING ABOVE SUBMISSIONS WE FIND T HAT THE ASSESSEE HAD FAILED TO ESTABLISH THE CLAIMED ABNORMAL LOSS RESUL TED INTO DISALLOWANCE OF THE SAME. THUS RELIEF UNDER EXPLANATION 1 TO SE CTION 271 (1) OF THE ACT IS NOT AVAILABLE TO THE ASSESSEE AS IT HAS NOT BEEN ABLE TO SUBSTANTIATE THE EXPLANATION OFFERED THAT THE CLAIMED LOSS WAS G ENUINE. STILL POSSIBILITY OF LOSS DUE TO ABOVE DISCUSSED INCIDENC ES OF THEFT AND DAMAGES CAUSED BY DEMOLITION OF UNAUTHORIZED CONSTR UCTION AND POOR MANAGEMENT OF BUSINESS AFFAIRS DUE TO ARREST OF THE MAIN PERSON CANNOT BE COMPLETELY RULED OUT. KEEPING ALL THESE FACTS A ND CIRCUMSTANCES IN TOTALITY WE FIND THAT THE A.O HAS ALREADY GIVEN SUF FICIENT RELIEF BY IMPOSING PENALTY AT MINIMUM PRESCRIBED RATE OF 100% OF THE AMOUNT SOUGHT TO BE EVADED FROM PAYMENT OF TAX. WE THUS D O NOT FIND REASON TO INTERFERE WITH THE PENALTY RAISED BY THE ASSESSING OFFICER, WHICH IN OUR VIEW HAS BEEN RIGHTLY UPHELD BY THE LD. COMMISSIONE R OF INCOME TAX (APPEALS). THE DECISIONS RELIED UPON BY THE LD. AR H AVING ITA NO. 205/DEL/2010 12 DISTINGUISHABLE FACTS ARE NOT HELPFUL TO THE ASSESS EE AS IN THE PRESENT CASE ASSESSEE NEITHER COULD SUBSTANTIATE ITS EXPLANATION ABOUT THE CLAIMED ABNORMAL LOSS NOR COULD IT ESTABLISH ITS BENOFIDE B EHIND SUCH EXPLANATION. THE FIRST APPELLATE ORDER AFFIRMING T HE LEVY OF PENALTY IN QUESTION IS THUS UPHELD. THE RELATED GROUNDS ARE T HUS REJECTED. 13. CONSEQUENTLY, APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 0 TH /08/ 2013. SD/- SD/- (SHAMIM YAHYA) (I. C. SUDHIR) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED THE 30 TH DAY OF AUGUST, 2013 R. NAHEED COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT NEW DELHI . ITA NO. 205/DEL/2010 13