What did the Tribunal hold?

The Tribunal noted that the theft was not disputed but the quantum of loss was an issue. Since the assessee's books were impounded, preventing them from providing necessary details, the issue was restored to the Assessing Officer for fresh adjudication.

The Revenue filed an appeal which was dismissed as withdrawn due to low tax effect. The assessee's appeal concerned the disallowance of a loss claimed due to the theft of transformers. The assessee could not provide details of the transformers' value as their books were impounded.

What were the issues?

Whether the loss claimed due to theft of transformers can be disallowed solely on the ground that the assessee could not provide the exact value due to impounded books of account.

ACIT vs Mahesh Kumar Singla, Patiala | ITAT Chandigarh 2018

Heard together (2 matters)

ITA No. 252/CHD/2016

ITA No. 267/CHD/2016

Read from the judgment's own cause title. This page is filed under one of them.

आदेश/Order

Per Sanjay Garg, Judicial Member:

These are cross appeals one by the Revenue and the other by the assessee filed against the order dated 19.01.2016 of the Commissioner of Income Tax (Appeals), Patiala [hereinafter referred to as CIT(A)]. First we take the appeal of the Revenue in ITA No. 252/Chd/2016.

2 ITA Nos. 252 & 267/Chd/2016- Sh. Mahesh Kumar Singla, Patiala

ITA No. 252/Chd/2016 – Revenue’s appeal

At the outset, the Ld. DR has been fair enough to admit that the tax

effect involved in Revenue’s appeal is less than the prescribed limit of Rs.

20 lacs for filing the appeal before the Tribunal as per CBDT Circular No.

3/2018 dated 11.7.2018. In view of this, he seeks to withdraw / not to

press the present appeal in the light of the aforesaid CBDT Circular dated

11.7.2018.

Request allowed. The appeal of the Revenue is dismissed as

‘withdrawn / not pressed’.

ITA No. 267/Chd/2016 – Assessee’s appeal

Now coming to the assessee’s appeal, the sole issue raised in the

appeal is regarding the claim of loss suffered by the assessee on account of

theft of transformers. The Ld. CIT(A) disallowed the said loss observing

that the assessee failed to prove the actual value of the transformers at the

time of the said theft. In this case, the assessee had claimed the loss as per

the cost price of the transformers. It was explained that since the books of

the assessee were lying impounded with the Assessing officer, hence, the

assessee was unable to furnish the details regarding the book value of the

transformers at the time of theft. The Ld. CIT(A), however, did not

consider the above submissions of the assessee and held that burden was

upon the assessee to prove the actual value of the transformers at the time

of theft and that the assessee was not supposed to shift his burden on the

Department. He, therefore, disallowed the entire loss claimed by the

3 ITA Nos. 252 & 267/Chd/2016- Sh. Mahesh Kumar Singla, Patiala

assessee and made the impugned addition of Rs. 26,83,600/- to the income

of the assessee.

Aggrieved by the order of CIT(A), the assessee has come in appeal

before us.

At the outset, Ld. Counsel for the assessee has invited our attention

to the impugned order of the CIT(A) and has stated that the books of

account even as on date are still lying / impounded with the Assessing

officer, hence, the assessee was unable to furnish the details sought by the

CIT(A). He has further submitted that the factum of theft of transformers

has not been disputed by the Department. In view of this, the Ld. CIT(A)

was not justified in disallowing the entire claim of the loss.

On the last date of hearing i.e. 26.9.2018, a specific question was

raised by the Bench to the Ld. DR as to despite framing of the assessment

order and even after passing of the order by the first appellate authority, why the books of account of the assessee are still lying impounded with the Assessing officer. The concerned Assessing officer was called upon to

explain in this respect vide order dated 26.9.2018. Today, Shri Kamaldeep

Singh, the concerned Assessing officer has come present and has stated

that he has recently joined and was not aware of the impounding of the

books by his predecessor. However, after going through the records, he has

submitted that the books of account of the assessee are liable to be

released and he has given an undertaking that the same will be released at

the earliest possible.

Now coming the merits of the case, the theft of the transformers has

not been disputed as the assessee has furnished sufficient evidence in this

4 ITA Nos. 252 & 267/Chd/2016- Sh. Mahesh Kumar Singla, Patiala

regard. The only question is regarding the quantum of loss suffered by the assessee. The assessee could not furnish the necessary details because of the reasons that his books of account were lying impounded with the Assessing officer. In view of this, as submitted by both the Ld. representatives of the parties, it will be appropriate in the facts and circumstances of the case to restore this issue to the file of the Assessing officer to decide it a fresh after giving opportunity to the assessee to furnish the necessary details. The appeal of the assessee is treated as allowed for statistical purposes.

Order pronounced in the Open Court on 11.10.2018.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member

Dated : 11.10.2018 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

ACIT, PATIALA vs. MAHESH KUMAR SINGLA, PATIALA

What did the Tribunal hold?

What were the facts?

What were the issues?

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