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| The Tax Publishers2020 TaxPub(DT) 5535 (Karn-HC) : (2021) 430 ITR 0414 INCOME TAX ACT, 1961
Section 145
Where AO recorded a finding that assessee had failed to substantiate its claim by producing evidence, however, the said aspect of the matter was neither considered by CIT(A) nor Tribunal, therefore, matter was remitted to AO and assessee was granted an opportunity to substantiate its claim for deduction of bid loss by adducing cogent material.
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Accounting method - Addition of bid loss - Hybrid system of accounting - Remand of matter
Assessee was engaged in the chit business and filed the return of income declaring a business loss. The return was processed under section 143(1) and was subsequently taken up for scrutiny and notices under sections 143(2) and 142(1) were issued to the assessee. AO inter alia disallowed the claim of bid loss to the extent on the ground that the aforesaid claim pertains to beyond the relevant previous year and assessee was following hybrid system of accounting. It was also held that despite several opportunities being afforded to assessee, he failed to produce the books of account to substantiate the aforesaid loss. Held: AO recorded a finding that assessee had failed to substantiate its claim by producing evidence. However, the said aspect of the matter was neither considered by CIT(A) nor the Tribunal. Order insofar as it pertained to allowing the claim of assessee for bid loss was quashed. Therefore, matter was remitted to AO and assessee was granted an opportunity to substantiate its claim for deduction of bid loss by adducing cogent material. Needless to state that AO shall decide the aforesaid issue in light of decision of the Supreme Court in case of Taparia Tools v. Jt. CIT [(2015) 372 ITR 605 (SC) : 2015 TaxPub(DT) 1438 (SC)].
REFERRED : Taparia Tools Limited v. JCIT (2015) 372 ITR 605 (SC) : 2015 TaxPub(DT) 1438 (SC), TRF. Ltd. v. CIT (2010) 323 ITR 396 (SC) : 2010 TaxPub(DT) 1481 (SC), CIT v. Bilahari Investment (P) Ltd (2007) 288 ITR 39 (Mad) : 2007 TaxPub(DT) 0346 (Mad-HC), CIT v. Shriram Chits (Karnataka) Pvt Ltd. (2015) 375 ITR 289 (Karn) : 2015 TaxPub(DT) 1934 (Karn-HC), Bilahari Investments P. Ltd. v. CIT (2008) 299 ITR SC 1 : 2008 TaxPub(DT) 1709 (SC) and Shriram Chits (Kar.) Pvt. Ltd. v. Asstt. CIT [ITA. No. 1386(Bang.)/2010 & ITA No. 1547(B)/2010, dt. 31-10-2011].
FAVOUR : Matter remanded.
A.Y. : 2005-06
IN THE KARNATAKA HIGH COURT
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