MINERAL METAL CENTRE (DISSOLVED) REPRESENTED BY ADITYA SHARMA,KOLKATA vs. I.T.O.,WARD-35(4), KOLKATA

It emerges from the perusal of the case file that assessee’s instant appeal suffers from 743 days’ delay in filing. The assessee has filed its authorized person’s medical record running into almost thirty pages indicating him to have undergone various treatments. The same has not been rebutted from Revenue side. I therefore hold that the impugned 743 days’ delay is neither intentional nor deliberate but on account of Mineral Metal Centre (Dissolved) Vs. ITO Wd-35(4), Kol. Page 2 reasons beyond assessee’s control. The same stands condoned. The case is now taken up for adjudication on merits.

It transpires during the course of hearing able assistance of Shri Singh; learned authorized representative and Shri Khanra, senior departmental representative that both the lower authorities have estimated assessee’s gross profit @ 6.02% alongwith unexplained expenditure of ₹6,69,561/- in the nature of undisclosed involving sum(s) of ₹66,501/-, loss of cash disallowance of ₹11,74,400/-, retainerhip expenses of ₹3,64,800/- and legal fees of ₹1,00,449/-; respectively. Learned counsel submits that the first head of undisclosed expenditure purchase deserves to be reserved since assessee has filed all the corresponding details and documentary evidence. In view of the fact that the assessee has failed to get all the impugned purchases verified; and on the other hand, the lower authorities have accepted the sales involved therefrom. I deem it appropriate that a lump sum disallowance of ₹50,000/- out of ₹6,69,561/- would meet the ends of justice. Consequential necessary computation shall follow.

Next comes second substantive grievance of loss of cash disallowance of ₹11,74,400/- made in both the lower proceedings. Learned counsel’s case is that the assessee had got a first information report registered with police authorities in support of the impugned claim. Case laws (1953) 23 ITR 481 (SC) Chainrup Sampatram vs. Commissioner of Income Tax, West Bengal held long back that principles of conservation and consideration of prudence in accounting treatment require that no anticipated profits be treated as income list they are realized, the converse is not true recording anticipated loss based on the first sight of res judicata probability. I therefore conclude that once the assessee has proved that it had got lodge police information / FIR, the same framed sufficiently reason to claim the impugned loss of cash amounting to ₹11,74,400/-.This second substantive ground is accepted therefore.

Next comes the latter two head(s) of retainership expenses and legal fees of ₹3,64,800/- and ₹1,00,449/-; respectively. Learned counsel fails to dispute although the assessee has filed all documentary evidence, it has failed to discharge its onus that Mineral Metal Centre (Dissolved) Vs. ITO Wd-35(4), Kol. Page 3 as the impugned expenditures to have been incurred wholly and exclusively for the purpose of business involving commercial expediency. I therefore deem it appropriate to restrict both the heads @ 10% sum involved in these peculiar facts and circumstances with a rider that same shall not be treated as a precedent in any other assessment year. Consequential computation to follow as per law.