AWB INDIA PVT. LTD. Vs. DEPUTY COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
Awb India Pvt. Ltd.
DEPUTY COMMISSIONER OF INCOME TAX
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Pramod Kumar, Member (A) -
(1.) BY way of this appeal, the appellant Assessing Officer has challenged correctness of order dated 3rd October 2012 passed by the Assessing Officer, in the matter of assessment under section 143(3) r.w.s. 144C of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), for the assessment year 2008 -09.
(2.) GROUND Nos. 1 and 2 are general in nature and do not call for any specific adjudication as such. In ground no. 3, the assessee is aggrieved is that, "the learned and DRP have erred in facts and on law in disallowing Rs. 1,60,369 on account of unrealized loss on the commodity derivatives claimed in accordance with regular method of accounting followed by the appellant".
(3.) SO far as this grievance of the assessee is concerned, the relevant material facts are like this. During the course of assessment proceedings, the Assessing Officer noticed that Rs. 57,82,954 disclosed by the assessee as gain on commodity derivatives is a net figure of such gains, after adjusting unrealized loss of Rs. 1,60,369. The Assessing Officer required the assessee to show cause as to why adjustment of Rs. 1,60,369 for unrealized loss not be disallowed. It was explained by the assessee that the said amount represents loss on open positions in trading transactions of commodity derivatives. The assessee explained, in substance, that once a loss can be reasonably estimated, as was the position in that case, such a loss is to be provided for in the books of accounts, and, in support of this broad contention, relied upon several judicial precedents, including landmark judgment in the case of Chainrup Sampatram Vs. CIT ( : 24 ITR 481), and accounting practices, including accounting standards. The Assessing Officer was, however, not impressed by any of these arguments and he proposed to disallow the unrealized loss on commodity derivatives. Aggrieved, assessee approached the DRP but without any success. It was in this backdrop that the AO disallowed Rs. 1,60,369. The assessee is aggrieved and in appeal before us.;
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