Kishan Kumar Shyam Sunder Goyal v. Additional Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.231 OF 2006 Kishan Kumar Shyam Sunder GoyalVs.Additional Commissioner of Income Tax ..Respondent ..Appellant Mr.K.R.Bhujle for the Appellant.None for the Respondent. CORAM :- DR.S.RADHAKRISHNAN &V.C.DAGA, JJ. DATE : 12TH NOVEMBER, 2008 P.C. .Heard the learned Counsel for the Appellant. In the above, the Appellant is seeking to raise the following substantial questions of law: 4.1) Whether, on the facts and in thecircumstances of the case, the Hon’bleTribunal erred in setting aside the order ofthe learned CIT(A) and restoring the order ofthe learned Assessing Officer? 4.2) Whether, on the facts and in thecircumstances of the case, the Hon’bleTribunal erred in confirming the disallowanceof loss of Rs.16,69,644/- merely by holdingthat the loss claimed by the assessee is notthe result of the normal trading activity? categorically given his findings that: The above explanation of the Assessee is verygeneral and is not convincing to me at least with regard to the losses incurred in thetransactions with M/s.Malvika Steel Ltd. andM/s.Kothari Steels Syndicate. The assessee isrequired to prove the genuineness of losswhich he failed to do. As far as purchasesand sale transactions with M/s.Malvika SteelLtd. and M/s.Kothari Steels Syndicaterespectively, it is observed that material hadnot been either received or delivered. Nodocuments in support of movement of materialcould be produced during the hearing. Thisfact had been mentioned in the order sheet.No transport bills were either produced later.No material has been produced by the assesseeto prove the fluctuation in market conditions.If this were to be the fact, losses shouldhave been incurred on other purchase and saletransactions also. The purchase bills and thecorresponding sale bills in respect of thetransactions with the above two parties showthat the gap between the alleged purchases andcorresponding sales is not more than one weekto three weeks. There are instances where thegap between purchase and sale is only 5 to 6days. Further, there is no reason why thepurchases made from M/s.Malvika Steel Ltd.should always be sold to M/s.Kothari SteelsSyndicate. The assessee maintains stocks atany point of time and no explanation as to whythe material purchased was not kept as stockand why it should be immediately sold at loss.Therefore, the loss of Rs.16,69,644/- incurredby the assessee cannot be considered as agenuine loss and this loss is only losscreated through book entries to suppress theoverall profits. Under the circumstances, Idisallow the loss of Rs.16,69,644/- incurredon the transactions with the above referredtwo parties. As the assessee suppressed theprofits to this extent and thereby concealedthe particulars of income, penalty proceedingsu/s.271(1)(c) of the I.T. Act,1961. 3. In view of the aforesaid findings of facts, we do not find any substantial question of law involved in the above. Hence, the Appeal stands dismissed. (V.C.DAGA,J.) (DR.S.RADHAKRISHNAN,J.)