SUMIT KUMAR SHAH,JAIPUR vs. ITO, JAIPUR

per his own sweet will thus observation of the Ld. CIT (A) deserves to be ignored and excluded.

ITA 502/JP/2012, 441 & 422/JP/2015_ 16 Sumit Kumar Shah Vs. ITO

It is further submitted that the Ld. CIT (A) has sustained the addition

merely on the basis of statement of Praveen Chippi recorded in the

remand proceedings, however the error and omissions in his statements

has already been explained above. Further, Praveen Chippi in his

ITA 502/JP/2012, 441 & 422/JP/2015_ 17 Sumit Kumar Shah Vs. ITO

affidavit accepted that goods were damaged at his premises due to rain.

In this regard reliance is placed on following case laws:-

Right to cross-examination

Kind attention of your honour is invited to the judgment of Hon’ble

Supreme Court in the case of CCE Vs. Andaman Timber Industries

reported in 2015 (324) ELT 641 wherein it

“6 According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disvuted the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them.

ITA 502/JP/2012, 441 & 422/JP/2015_ 18 Sumit Kumar Shah Vs. ITO

Further, reliance is placed on the judgment of Hon’ble Allahabad High Court in the case of CCE Vs. Shyam Traders reported in 2016 (333) ELT 389 wherein, the above mentioned judgment of Supreme Court in Andaman Timber Industries was followed and the requirement of allowing cross-examination of witnesses was held as indispensible for adjudication.

39 TW 21 4 CIT Vs. Bhanwar Lai Murwatiya (Raj. High Court, Jodhpur)

Whether addition can be made on the basis of statements in a case wherein no opportunity of cross examination was allowed to the assessee ? - Held No.

Laxmanbhai S. Patel Vs. CIT [ITR No. 41 of 1997, Dated 22-07-2008] (Guj.)

The legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross- examination, if the addition is made, the same is required to be deleted on the ground of violation of the principles of natural justice.

It is thus humbly submitted that the meteorological report could not be

solely made basis for denying the legal claim of damage of goods as

relied by the Ld. AO by ignoring the other evidence because the

meteorological report was merely and indicator of average rain fall at a

particular place / city in a particular day and not a exact measure of

rainfall in a part of a city, therefore, addition made by the Ld. AO based

on assumption and presumption and further based on wrong

appreciation of facts deserves to be deleted and the loss of stock

claimed by the assessee deserves to be allowed more particularly when

the assessee has submitted every plausible evidence to support his

ITA 502/JP/2012, 441 & 422/JP/2015_ 19 Sumit Kumar Shah Vs. ITO

claim and loss suffered by the assessee is genuine looking to the facts

and circumstance of case.

authorities below.

the various decisions relied upon by both the sides. The assessee is

dealing in business of Bandhej and silk sarees and the assessee was

regularly sending his sarees for dying and printing job work. This was a

regular feature of the assessee’s business. The assessee claimed the

loss on account of damage of stock of sarees due to rain, which was

denied by the revenue. The assessee in support of claim of damage of

goods has submitted confirmation and affidavits from both the job

workers namely Mohammed Shafi Prop. M/s. Mohammed Shafi Dyers

and Shri Praveen Chippa Prop. M/s. Aarti Enterprises. Copies of bills

raised by these job workers were also submitted. The affidavit of

transporter Shri Gulzar Ahmed, who transported the damaged goods

were also submitted. An affidavit of witness namely Shri Shehzad, who

was present during the sale of damaged goods to Shri Ram Ratan Singh

of Kanpur was filed. The identity proof with address of Shehzad was

also filed, which is placed at page No. 46 and 47 of the paper book. The

ITA 502/JP/2012, 441 & 422/JP/2015_ 20 Sumit Kumar Shah Vs. ITO

copy of sale bill placed at page No. 48 of the paper book was also

submitted. Copy of Dainik Jagran newspaper dated 08/09/2011 placed

at page No. 49 of the paper book and copy of the necessary information

published in Khoji Narad on 08/09/2011 is also paced at page No. 50 of

the paper book wherein the assessee has given an advertisement to the

public to give information regarding Shri Ram Ratan Singh of Kanpur to

whom the assessee has sold these goods. Similarly such classified

advertisement were also given in the newspaper namely ‘Rashtriya

Sahara’ on 10/09/2011 to 12/09/2011, which are placed at page No. 53

to 55 of the paper book. Thus the assessee has made necessary efforts

to locate Shri Ram Ratan Singh of Kanpur to whom the goods were sold

to establish his claim. The assessee has also submitted copies of news

papers which has reported regarding rainfall in the month of September

and December, 2007 in Jaipur. The assessee has also submitted

necessary evidences like copy of death certificate of assessee’s mother

and medical certificate for her hospitalization issued by Santokbha

Durlabhji Hospital to establish that during the relevant period, the

assessee was busy in medical treatment of his mother and due to which

he could not lift the goods from the premises of the job workers. All

these facts and circumstances suggest that the assessee has suffered

genuine loss on account of rain by damaging stock of sarees. He had

ITA 502/JP/2012, 441 & 422/JP/2015_ 21 Sumit Kumar Shah Vs. ITO

submitted sufficient evidences to establish the business loss occurred on

account of rain at the premises of the job workers. Therefore, the

disallowance of the loss suffered by the assessee was not justified.

Accordingly, addition of Rs. 26,00,650/- is deleted.

ITA No. 422/JP/2015 are with regard to partly sustaining/deleting

penalty U/s 271(1)(c) of the Act.

These are the cross appeals with regard to partly

deleting/sustaining the penalty levied U/s 271(1)(c) of the Act. Since the

assessee’s appeal in quantum, addition has been allowed, therefore, the

appeal of the assessee is allowed and the appeal of the revenue stand

dismissed.

and ITA No. 422/JP/2015 is dismissed.

Order pronounced in the open court on 20/09/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20th September, 2017

*Ranjan

ITA 502/JP/2012, 441 & 422/JP/2015_ 22 Sumit Kumar Shah Vs. ITO आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellants- Shri Sumit Kumar Shah, Jaipur. 1. izR;FkhZ@ The Respondent- The ITO, Ward 4(1), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 502/JP/2011, 441 & 422/JP/2015) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत