Shri Jayshri Ginning & Spinning P. Ltd., Jetpur V. The Asstt. Commr. of Income Tax, Cen. Cir.-1, RAJKOT-GUJARAT

ITA 53/RJT/2017

AI Insights

The case involves Jayshri Ginning & Spinning Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-11, confirming the assessment order passed under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2011-12. The primary issues in the appeal were the treatment of a business loss claimed due to forward contracts and the disallowance of market cess deduction. The Assessing Officer (AO) had treated the business loss as speculative and disallowed it, while the market cess was disallowed due to lack of evidence of payment by the due date of filing the income tax return. The Tribunal dismissed the appeal due to the assessee's failure to provide supporting documents.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 134510 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-10-2022
• Assessment Year: misc
• Appeal Filed On: 21-01-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Speculation loss; Set aside
• Section: 43B; 139; 143(3); 43(5)

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, (Conducted through E-Court, Rajkot) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER, And Ms MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./ITA No. 53/Rjt/2017 िनधाᭅरण वषᭅ/Asstt. Years: 2011-2012 Jayshri Ginning & Spinning Pvt. Ltd., National Highway, Dhoraji Road, Navagadh, Jetpur. PAN: AABCJ8939K Vs. The A.C.I.T, Central Circle-1, Rajkot. Assessee by : None Revenue by : Shri Shramdeep Sinha, CIT. D.R सुनवाई कᳱ तारीख/Date of Hearing : 01/11/2022 घोषणा कᳱ तारीख /Date of Pronouncement: 14/12/2022 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-11, dated 05/10/2016 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2011-12. ITA No. 53/Rjt/2017 A.Y. 2011-12 2 2. The assessee has raised the following grounds of appeal: 1. The grounds raised in this appeal are without prejudice to one another. 2. The Ld.A.O erred in treating the business loss of Rs.1894483/- as speculation in nature and the Ld.CIT(A) erred in confirming the order of the Ld.A.O in this regard. On the facts and circumstances of the case it is contended that the same ought to be treated as a business loss. 3. The Ld.AO erred in law and on facts in making an addition of Rs.115210/- u/s.43B and the Ld.CIT(A) erred in law and on facts in retaining the same. 4. The Ld.CIT(A) erred in law and on facts in not considering the request of the assessee for additional evidences and deciding the matter without appreciation of the facts of the case. 5. It is respectfully submitted that the matter may kindly be remanded/ set aside and the opportunity may kindly be given to the appeallant. 6. Your appellant craves leave, alter, and amend any of the ground stated here above. 3. At the outset, we note that the appeal was instituted by the assessee way back in the year 2017. The appeal has been listed for hearing on several occasions. But none of the time, there was any appearance on the date of hearing from the side of the assessee. Thus, it is transpired that the assessee is not serious in pursuing the appeal filed by it. Accordingly, we decided to proceed and to adjudicate the appeal filed by the assessee ex parte. 4. The issues raised by the assessee are that the learned CIT (A) erred in confirming the addition made by the AO for ₹ 18,94,483.00 and 1,15,120.00 on account of speculative loss and markets cess respectively. 5. The facts in brief are that the assessee in the present case is a private limited company and engaged in the business of ginning and spinning. The assessee in the year under consideration has claimed loss of ₹ 18,94,483.00 representing the forward contract as business loss in the return of income. However, the AO in the absence of necessary documents to justify that the impugned loss falls under the exceptions provided under section 43(5) of the Act held that such loss is speculative in nature and hence therefore, the same cannot be allowed as business loss. Thus ITA No. 53/Rjt/2017 A.Y. 2011-12 3 the AO disallowed the loss which was claimed as deduction against non-speculative business activity of the assessee and allowed the same to be carried forward. 6. The AO, likewise, also found that the assessee has claimed the deduction on account of markets cess for ₹ 1,15,120.00 which was subject to the deduction on actual payment in pursuance to the provisions of section 43B of the Act. But the assessee has not filed any documentary evidence to demonstrate that the payment for the markets cess was paid on or before the due date of filing the income tax return specified under section 139 of the Act. 7. Aggrieved assessee carried the matter before the learned CIT(A) who has confirmed the order of the AO by observing that the assessee failed to file any evidence in support of his contention and against the findings of the AO. 8. Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us. 9. The learned DR before us vehemently supported the order of the authorities below. 10. We have heard the ld. DR and perused the materials available on record. The primary onus lies upon the assessee to file the necessary documentary evidences in support of the deduction for the expenses or loss claimed in the income tax return. From the preceding discussion, we note that the assessee has not filed any detail in support of the claim made by it in the income tax return. Therefore both the lower authorities did not allow the claim of the assessee while determining the income under the head ”business and profession”. Even before us the assessee failed to file any supporting documents despite the fact that enough opportunities were provided to it (the assessee). Thus, in the absence of any assistance from the side of the assessee and any contrary information against the finding of the authorities below, we do not find any infirmity in the order of the lower authorities. ITA No. 53/Rjt/2017 A.Y. 2011-12 4 Accordingly, we uphold the same. Hence the ground of appeal of the assessee is hereby dismissed. 11. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the Court on 14/12/2022 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 14/12/2022 Manish