ORDER
Bhavnesh Saini, Judicial M.
Both the cross appeals are directed against the order of the CIT (A)-XV, New Delhi dated 2-6-1997 for the assessment year 1993-94.
2. Both the appeals arise out of the same order of the CIT (A), therefore, both were heard together and we dispose of the same by this common order.
3. We have heard the learned representatives of both the parties and gone through the observations of the authorities below and the details submitted in the paper book filed by the counsel for the assessee. Before taking the grounds of appeal separately for the purpose of disposal of both the cross appeals, it would be necessary to mention certain facts, which are as under :
4. The assessee is an Individual and member of Delhi Stock Exchange. He deals in purchase and sale of stocks and shares on its own behalf and on behalf of constituents. The assessee filed the return of income which was taken up for scrutiny. During the course of assessment proceedings, the assessee was asked to furnish the details of transactions settled otherwise than delivery. The assessee on 16-2-1996 filed difference list issued by the Delhi Stock Exchange. These difference lists are not indicative of the transactions settled otherwise than by delivery. The assessee was informed that these difference lists do not constitute the details of settlement otherwise than delivery. The assessee was asked to file details of transactions settled otherwise than delivery. The assessee claimed before the assessing officer that the details of transactions settled otherwise than delivery as per different bills which can be co-related statement-wise and scripswise, all the transactions are on behalf of the client. The assessing officer on perusal found that the assessee had carried out the transactions otherwise than delivery on his own behalf. The speculation profit/loss resulting from these transactions has been deviated into the profits of business. The assessing officer has mentioned certain facts in the assessment order and considering the nature of complexity of the account of the assessee and in the interest of revenue sent the proposal for audit of the books of account under section 142(2A) of the Income Tax Act and on getting approval, special audit was directed through M/s. R.K. Tuli & Associates. The assessee was to get report from the C.A. on the following points :
(1) The details of transaction settled otherwise than delivery in Delhi Stock Exchange.
(2) The details of transactions settled otherwise than delivery in outside Delhi Stock Exchange.
(3) The details of transactions carried out by the assessee outside the Delhi Stock Exchange.
The assessing officer recorded that the assessee did not cooperate with the Auditor and the time was extended many times on the request of the assessee to obtain the report. However ultimately the audit report under section 142(2A) was received on 20-8-1996, which is as under :
(a) Speculative transaction of self in use.
The assessee has done respeculative business on behalf of the clients as well as for himself. The speculative loss incurred on the assessee was adjusted against the business income, which as per Income Tax Act is not allowable. The total amount of speculative loss for adjusting profit works out to be Rs. 2,32,813 which was adjusted against the business income.
(b) Speculative transaction of self, out of Stock Exchange (Not broker) :
It has been noticed that the assessee has issued different bills of various parties resulting in speculative loss to the tune of Rs. 16,92,610. These entries were not reflected in the transaction register. It is clear that these speculative transactions were carried on by the assessee out of Exchange. This loss was adjusted by the assessee against regular income.
(c) Transaction with Bombay broker-The assessee carried out the transaction of purchasing 25,000 shares of SCICI from Bombay broker in the name of M/s. V.B. Desai & Co. in April, 1992 and the same was sold at a profit of Rs. 10,25,000 which is the transaction out of Delhi Stock Exchange and needs verification.
The assessee was informed of the above facts and his explanation was called for. The assessee filed the explanations. However, the same did not find favour from the assessing officer and the assessing officer made the addition of Rs. 2,32,830 plus Rs. 16,92,160 = Rs. 19,85,440 and held that the assessee who is saddled with the burden to prove that the transactions fall under clause (b) and clause (c) of the proviso to section 43(5) has failed to lead evidence in support of his contention. These transactions are admittedly where no delivery has taken place. These are speculative transactions. Total amount of speculative transactions mentioned Rs. 19,85,440, which is not to be adjusted against the business income of the assessee. The assessing officer also held that it shall however, be carried forward in the subsequent assessment years to be adjusted against the speculative profits, if any, in these succeeding years. The assessee is in appeal on this ground before us, as the CIT (A) also confirmed the addition, which we shall take up separately.
5. On the second issue, the assessing officer made the addition of Rs. 10,25,000. As the assessing officer did not believe the evidence and explanation of the assessee and held that the assessee has failed to prove the genuineness of the transaction with M/s. V.B. Desai & Co. resulting in speculative profit of Rs. 10,25,000. The assessee has shown this as his income. It shall however, be assessed as income from undisclosed sources. The CIT (A) however, deleted the above addition upon which the revenue is in appeal.
6. Now we deal with both the cross appeals as under :
ITA No. 4835/1997 (departmental appeal) :
7. This appeal is filed on the following grounds of appeal
“1. On the facts and in the circumstances of the case, the learned CIT (A)-XV, New Delhi has erred in deleting the addition of Rs. 10,25,000 made by the assessing officer as income from undisclosed sources.
2. On the facts and in the circumstances of the case, the learned CIT (A)-XV, New Delhi has erred in holding that the amount of Rs. 10,25,000 represented assessees income from speculative profits.
3. On the facts and in the circumstances of the case, the learned CIT (A)-XV, New Delhi has erred in ignoring that the assessee had failed to adduce conclusive evidence to establish the genuineness of transaction of forward trading in 25000 shares of SCICI with M/s. V.B. Desai of Bombay.
4. On the facts and in the circumstances of the case the learned CIT (A)-XV, New Delhi has erred in not correctly appreciating the facts brought out by the assessing officer, especially the manner in which the said transaction has been recorded in the books of account.”
8. The assessing officer made the addition of Rs. 10,25,000 as income from undisclosed sources, which was claimed to be speculative profit on purchases and sales of 25,000 shares of SCICI from M/s. V.B. Desai on 6-4-1992 and 30-4-1992. The assessing officer accordingly has not allowed the adjustment of speculative loss determined by him at Rs. 19,85,440 although not shown by the assessee. The assessing officer has taken the following points :
(i) The assessee did not produce either M/s. V.B. Desai, or copy of the assessment order.
(ii) There is a difference in permanent account No. as given in the confirmation letter and the copy of the letter account submitted.
(iii) The original contract notes were not produced and xerox copies were given which are not admissible as evidence. The copies are also unsigned.
(iv) Confirmation letter of M/s. V.B. Desai has been signed by some body but it is not known by whom.
(v) In the copy of account of M/s. V.B. Desai, each transaction of the purchase is entered on 18-5-1992 although the purchase was made on 6-4-1992.
(vi) The purpose of showing speculation profit was only to adjust the losses incurred.
(vii) The transaction registered was not impounded in the first lot but only subsequently implying the perhaps that between 1st and second hearing for the impounding this entry was interpolated.
(viii) The ledger account for the next year was not produced on the plea that the same was with C.B.I. whereas the assessee could have obtained it from them.
9. The assessee submitted before the CIT (A) as follows :
(i) M/s. V.B. Desai is based in Bombay and as such the assessing officer could not have asked for his production and in any case, the assessee was unable to do so and inform the assessing officer accordingly regarding the non-production of the assessment order also. It stated that the assessee was unable to obtain it from M/s. V.B. Desai. It is submitted, however, that no adverse inference can be drawn as M/s. V.B. Desai is assessee to tax and the assessment order would not have thrown any more light than the information contained in the confirmation letter already filed.
(ii) As regards the difference in Permanent Account No., it is stated that Central Circle and Assistant Commissioner were correctly mentioned in both the documents and only difference was in GIR No., which was either 36 or 39 but vide letter dated 26-9-1996, the correct number was also intimated to be 36 and not 39. In this letter, request for issue of summon to M/s. V.B. Desai was also made.
(iii) As regards non-furnishing of the original contract noted, it is stated that the copy furnished as the computer generated copy giving complete details and such copies do not carry signatures and as such no adverse inference should be drawn.
(iv) Regarding the identity of the person, who has signed confirmation letter, it is submitted that the assessing officer did not ask the assessee to clarify the identity or signature. It is submitted that confirmation letter was signed by the authorised signatory.
(v) As regards the discrepancy about the date of purchase, it is clarified that although the entry was made on 18-5-1992, it was clearly mentioned that the contract was made on 6-4-1992 and as such there is no discrepancy.
(vi) As regards the contention of the assessing officer that speculative profit was shown only to adjust the loss, it is submitted that this would not have helped the assessee. The loss incurred by the assessee would have been carried forward otherwise if not adjusted. In any case, it is submitted that the loss was not shown by the assessee but was worked out by the assessing officer. It is further stated that the transactions resulting into profit by the assessee are on 6-4-1992, whereas the loss has been incurred much later in February/March, 1993 and as such it could not be said that the profit shown by the assessee in anticipation of the loss much later.
(vii) As regards the non production of the transaction register, in the first lot, it is submitted that there was no interpolation in the register, which was impossible as there were hundreds of transactions recorded in the register.
(viii) Regarding the non-furnishing of the ledger, filed next year, it is submitted that the current cars ledger was already impounded by the assessing officer and the next years ledger could not be produced. It was high by the C.B.I. The copy of this letter is furnished, which only shows that the payment has been made by M/s. V.B. Desai to the assessee after deducting bank charges.
10. It was accordingly submitted that the order of the assessing officer in treating the amount of Rs. 10,25,000 as income from undisclosed sources was unjustified and contrary to the facts. It was also explained that the transactions of SCICI do not take place in Delhi but only in Bombay because of high volume of transactions. Therefore, the transactions were done by the assessee in the shares of this company at Bombay. The CIT (A) considering the facts and circumstances of the case and the submissions of the assessee, allowed the appeal of the and addition was deleted. The operative part of the order of the CIT (A) in para 17 is reproduced as under :
“17. After considering the facts and circumstances of the case, I am of the view that the addition made by the assessing officer is not justified having been made on the incorrect appreciation of the facts. The grounds on which addition has been made have now been duly clarified by the assessee. I find lot of force in the arguments of the assessee that the profit was made on 6-4-1992 whereas the loss against which this profit was adjusted was made much later in the month of February/March, 1993 and as such the assessee could not have anticipated this loss at the time of making the profit in April, 1992. The assessee had furnished copies of the contract notes before the assessing officer as well as confirmation letters from M/s. V.B. Desai and there is nothing on record to show that either the transaction or the confirmation letter was not genuine. The payments have also been duly reflected as seen from the copy of the ledger account for the next year furnished by the assessee. The so called discrepancies have been duly explained by the assessee as discussed above. The addition made is accordingly deleted. The profit will be treated as speculation profit which will be eligible to be adjusted with the speculation loss.”
11. The learned Departmental Representative relied upon the orders of the assessing officer and submitted that the assessee has failed to prove the genuineness of the transaction with M/s. V.B. Desai & Co. and as such the assessing officer has rightly assessed the same income from undisclosed sources. The learned Departmental Representative argued that the onus was on the assessee to prove the contentions raised before the assessing officer and the assessee was given opportunity but the assessee failed to prove the facts. Therefore, the CIT (A) was not justified in deleting the addition.
12. On the other hand, the counsel for the assessee relied upon the orders of the CIT (A) and submitted that the CIT (A) on proper verification of the facts deleted the entire addition. The W. Counsel for the assessee also argued that the assessee has proved genuineness of the transaction with M/s. V.B. Desai & Co. and all the papers were filed before the authorities below. In support of his contention, he has further argued that the assessee has shown the income rightly as speculative profit, therefore, the assessing officer was not justified in taking it as income from undisclosed sources. The learned counsel for the assessee submitted that all the confirmations and details based on the material were filed, which clearly prove that the assessee has proved genuineness of the transaction. The learned counsel for the assessee also submitted that the assessee has explained all the discrepancies observed by the assessing officer but the assessing officer has wrongly made the addition. The learned counsel for the assessee also submitted that the assessee never claimed setting off of the speculative losses against the income as the assessing officer has worked the speculative losses subsequently. The learned counsel for the assessee submitted that the assessee has been able to prove its case. The learned counsel for the assessee has taken us to paper book in which all the evidences have been filed to support the contention.
13. We have considered the rival submissions and the material available on record and the paper book. The assessee has filed in the paper book copy of the account of M/s. V.B. Desai & Co., bank statement when money received, B.S.C., Bombay official quotation list on 6-4-1992 and 29-4-1992, confirmatory letter from V.B. Desai, copy of the account of Sreen & Co. and copy of the bill of V.B. Desai in the paper book. On going through the evidences available on record, we are of the view that the assessing officer has wrongly held that the assessee failed to prove the genuineness of the transaction. The evidences and materials available on record clearly show that the assessee has been able to prove the genuineness of the transaction with M/s. V.B. Desai & Co. The assessee has explained the discrepancies mentioned by the assessing officer in the assessment order. The discrepancies have been specially considered by the CIT (A) in reference to the observation of the assessing officer. Therefore, the CIT (A) has rightly taken into consideration the reply of the assessee and the explanations and clarifications. In view of the above, and the material available on record we do not find any justification to interfere with the orders of the CIT (A). We uphold the same and dismiss the departmental appeal. No other ground is argued or pressed.
14. As a result, the appeal of the revenue is dismissed.
I.T.A. No. 4844/1997 (Assessee : Appeal) :
15. This appeal by the assessee is filed on the following grounds
“A. That on the facts & circumstances of the case the learned CIT (A) erred in-
(i) Disallowing a sum of Rs. 1,50,000 out of Rs. 2,32,830 as speculative losses.
(ii) Disallowing a sum of Rs. 16,92,160 claimed as business loss incurred by the assessees employee Sh. Anuj Kapil.”
16. The brief facts as taken from the appellate order are that the assessing officer on this ground of appeal held that the loss of Rs. 19,85,440 should be speculative loss and as such the same could not be adjusted with the business income and has to be carried forward in the subsequent assessment years to be adjusted against the speculative profits if any. The amount comprised of the two items namely loss of Rs. 2,32,830 on account of trading by the assessee himself and the loss of Rs. 16,92,610 representing difference bills issued by the assessee to different persons. It was claimed before the assessing officer that the amount off loss of Rs. 2,32,830 did not represent speculative loss as the same was covered by the provisions of section 43(5)(b) and (c) of the Act, as the hedging transactions. The assessing officer stated that the assessee could not prove this contention. Therefore, the claim was rejected. It was submitted before the CIT (A) that the assessee had to deal with these shares of his account as the clients for whom such shares were contracted, either did not take delivery of the shares on due date or there was mis-match in the shares. It was submitted that such transactions could not be treated as speculative transactions and as such the assessing officer was unjustified in not adjusting the loss with other income. The CIT (A) on consideration of the facts was of the view that the contention of the assessee can be accepted only partly. Out of total of 125 transaction 50 were considered for the profit and remaining for the losses. The CIT (A) on such facts observed that it does not appear that the loss was deliberately credited by the assessee only to reduce the profits. However, the facts still remains that some of the transactions resulting into losses were made without the actual delivery of shares. Such transactions have to be treated as speculative in nature even if such transactions were originally contracted for the clients and not for the self. In the absence of bifurcation of the loss resulting from transactions into the loss on account of delivery of shares and the loss without such delivery the CIT (A) was of the view that to consider reasonably the speculative loss to the extent of Rs. 1.50 lakhs and treated the balance loss of Rs. 82,830 to be trading loss. The CIT (A) accordingly allowed the relief to the assessee to the extent of Rs. 82,830. The learned counsel for the assessee submitted that these are actual transactions and therefore, there was no dispute about the trading and the CIT (A) has already accepted part of the contention. The learned counsel for the assessee in the alternate submitted that the estimate is on the higher side. On the other hand, the learned Departmental Representative relied upon the orders of the authorities below. On consideration of the above facts, it is clear that it is a case of estimate of the assessee against the estimate made by the CIT (A). The CIT (A) considered part of the loss to be trading loss. However, no specific reasons have been given for taking the ratio. Therefore, considering the facts of the case, the addition as sustained by the CIT (A) in a sum of Rs. 1,50,000 appears to be excessive. Therefore we reduce the addition to Rs. 75,000 in all.
17. As a result, this ground of appeal of the assessee is allowed partly.
18. The remaining part of the loss is the loss of Rs. 16,92,610 which is on account of the issue of difference bills by the assessee to the clients on account of purchase of shares on their in behalf. The facts as stated are that the difference bills have been paid to nine persons and such transactions are not recorded in the transaction register, as observed by the assessing officer. The assessing officer has given this finding on the basis of the report of the auditors furnished by way of the special audit ordered by the assessing officer under the provisions of section 142(2A) of the Income Tax Act. All such transactions were done on single day i.e., 23-3-1993, except one which were done on 19-2-1993. In the assessment order, the assessing officer has observed that the assessee has failed to substantiate and prove his explanation with regard to its loss that the same was covered under the provisions of section 43(5)(b) & (c) of the Act by way of hedging. He has further held that the assessee has failed to show that these transactions were settled by the delivery of shares and accordingly he has held these transactions to be in the nature of speculation and accordingly held the loss to be of speculative nature. At the appellate stage before the CIT (A), the assessee made a request for admission of additional evidence in the shape of confirmation letters from the nine parties, proof of their identities, copies of their accounts duly confirmed by the parties and the affidavit of the assessee. The additional evidences were admitted. The assessing officer also furnished his comments against the additional evidences which were considered by the CIT (A). It was explained before the CIT (A) that the loss represent the business loss as the loss had arisen during the course of carrying on of the business of purchase and sale of shares. It was submitted that the loss has arisen on account of confirmation of certain transactions with the clients by the then employee of the assessee, Mr. Anuj Kapil who was incharge of taking orders from the clients and ensuring execution of such orders and his failure subsequently to carry out such confirmed transaction on the floor of the house. It was submitted that because of such confirmation by his employee and non-execution of such transaction by him, the assessee had no choice but to immediately square up these transactions on the prevailing market rate to avoid further loss as the market conditions were volatile. It was accordingly submitted that it has resulted in loss of Rs. 16,92,610. The assessee also filed confirmatory letter before the CIT (A) and the affidavit of the assessee, in support of the contention. The assessing officer in his remand report again submitted that the transactions were in the nature of speculative transaction. The assessing officer also submitted in his report that the statement of Anuj Kapil i.e., employee of the assessee was recorded on oath from it is emerged that he was merely a B.Com. Graduate and had joined M/s. Jolly Enterprises in March, 1991 as Accountant and after about an years experience, joined the assessee in April, 1992. It further emerged from his statement that although Mr. Kapil was dismissed from his service by the assessee in April/May, 1993, after he discovered the loss caused to him by Mr. Kapil in Feb./March, 1993 yet he was re-employed in the accounts department of another Proprietary concern of the assessee namely S.E.M. Financial Services. Mr. Kapil left this concern also after about a year in April, 1994 and started his own business or repairing of electronic goods. It was also found that Mr. Kapil did not remember the details of any of the so-called speculative transaction in question resulting in huge losses to his employer i.e., the assessee. From the above facts, the assessing officer submitted in his remand report that Mr. Kapil could not have been in position to take orders from the clients and ensure execution of such orders on the floor of the house. It was also submitted that had Kapil been responsible for such losses as claimed, then he would not have been reemployed by the assessee immediately thereafter in his another concern. The remand report of the assessing officer was confronted to the assessee and the assessee also made counter statements. The CIT (A) considering the facts, and submissions on record, dismissed the appeal of the assessee and confirmed the order of the assessing officer. The operative part of the appellate order of the CIT (A) in paragraph 7 is reproduced as under for consideration:
“7. I have given my careful consideration of the facts and circumstances of the case as well as the arguments advanced by the learned counsel for the assessee and the comments given by the assessing officer in his report on the additional evidence. In my view of the assessee has no case at all in this matter. From the facts discussed above, it is evident that Mr. Kapil did not have a long standing in the business of the assessee and was thus not capable of taking independent decisions of such large magnitude without the knowledge and consent of the assessee. It is indeed preposterous to think that Mr. Kapil would confirm orders with the clients to the extent as large as Rs. 16,92,610 on a single day and then either forget or fail to executive them and that too without the knowledge of the assessee who is a share broker in this line of business for a number of years. It is very strange that on the one hand Mr. Kapil is accused of bungling in the booking of orders and then failing to discharge them causing huge loss of about Rs. 17 lakhs and on the other hand to re-employ him in the another proprietary concern of the assessee in almost a related business without any loss to the employee in his salary. Loss of Rs. 16,92,610 is not a small loss and no business man would ignore such a huge loss and keep the employee in service who is alleged to have caused it without taking any action whatsoever against him. Further more, Mr. Kapil has left the services even with the order concern and started his own business in a totally different line of business showing thereby that he was not so expert in his line of business after all. If Mr. Kapil was really responsible for the huge loss caused by him, he would certainly have remembered the names of the parties and the names of the shares which had resulted in such a large loss to the assessee. Surprisingly he could not give details of even a single share of the name of a single client. In view of these facts, I am convinced that the story of the assessee about the business loss caused by Mr. Anuj Kapil is merely an after thought to cover up the different bills issued by the assessee to the 9 parties in question merely to reduce profits and to pass on entries to them for their capital formation. It is important to note that the plea of loss having been caused by the employee Mr. Anuj Kapil was never taken before the assessing officer and is now taken up in the appellate proceedings for the first time and the same has been found to be not genuine as discussed above. The assessee, in my opinion, has miserably failed to substantiate its case of the business loss. The claim is accordingly rejected and the order of the assessing officer is confirmed on this point.”
19. We have heard the learned representatives of both the parties. The learned counsel for the assessee submitted that the details are filed in the paper book on the issue and the copy of the statement of Anuj Kapil which was recorded under section 131 of the Income Tax Act. The learned counsel for the assessee argued that the assessee settled the disputes by paying the difference. The learned counsel for the assessee also argued that it was a mistake or negligence of the employee so it should be allowed as a business loss under section 37 of the Income Tax Act. The learned counsel for the assessee also submitted that confirmation of all the parties were filed before the CIT (A). Copies of the same are also filed in the paper book. The learned counsel for the assessee submitted that it was a case of breach of contract and the payments were made to the parties being the damages and as such it could not be considered to be speculative transaction. The learned counsel for the assessee in support of his contention relied upon CIT v. Hans Machoo & Co. (2001) 247 ITR 79 (Delhi), CIT v. Shantilal (P) Ltd. (1983) 144 ITR 57 (SC) and CIT v. Kamani Tubes Ltd. (1994) 207 ITR 298 (Bom). The learned counsel for the assessee submitted that there is no reason why the assessee will speculate for others. The learned counsel for the assessee accordingly submitted that the appellate order may be set aside. On the other hand, the learned Departmental Representative relied upon the orders or the authorities below and argued that the entire alleged loss is caused in one day and as such it is not an honest business loss. The learned Departmental Representative further argued that the employee acted at the instance of the assessee and the transaction is clearly speculative transaction. The learned Departmental Representative further argued that the assessee has not explained as to why Mr. Kapil was re-employed if he has caused losses to the assessee.
20. We have considered the rival submissions and the material available on record and the findings of the authorities below. In this case, from the very beginning of the assessment proceedings, the assessing officer had been asking information with regard to transaction settled otherwise than delivery as per difference bills. The assessee had been seeking adjournments and was not filing the details before the assessing officer. The assessing officer considering the conduct of the assessee and having regard to the nature of complicity of the accounts of the assessee and in the interest of the revenue directed for special audit of the books of account of the assessee under section 142(2A) of the Income Tax Act, Specific queries were raised by the assessing officer during the special audit. The special audit has clearly stated that the assessee has issued difference bills of various parties resulting in speculative losses. It was also observed special audit that these entries were not reflected in the transaction register. The objections of the special audit are not met by the assessee either before the assessing officer or before the CIT (A). The findings of the authorities below therefore had been that the transaction as stated by the assessee are not genuine. The submission of the assessee before the CIT (A) had also been that because of the confirmation by his employee and non-execution of such transaction by him the assessee had no choice but to settle the transactions. This difference shows that the transactions were speculative in nature. The assessee failed to prove if there was any delivery in any of the transactions. The assessee had taken a plea before the CIT (A) about the case of negligence of Anuj Kapil but he in his statement has failed to explain any of the transactions carried on by him, which resulted into losses. The reply of the assessee with regard to re-employment of such employee is also not blievable as according to the assessee, Mr. Anuj Kapil was dismissed from the services but was again reemployed for which no plausible reasons have been explained. The assessee had filed application for admission of additional evidence before the CIT (A) which are confirmatory letters of the nine parties but no such facts were brought to the notice of the special auditor or to the assessing officer. The assessee remained silent on these points and have not clarified any of such fact before them. The conduct of the assessee, therefore, clearly dis-entitles him from alleging that it was a business loss. Even according to the special auditor such transactions have not been recorded in the transaction register. These facts also strengthen the view of the authorities below that the claim of the assessee with regard to nine parties is clearly an after-thought and as such cannot be taken into consideration. Even we find from the confirmatory letters carry of which are filed in the paper book that no specific details have been mentioned
With regard to any of the transactions, between such parties and the assessee. In the absence of any explanation, the CIT (A) was justified in rejecting the afterthought story of the assessee. Considering the above facts and the discussion above, we are of the view that the assessee has failed to prove it to be a business loss. The case laws relied upon by the assessee are on the point of settlement of the contract which resulted into payment of the damages for breach of the contract. However, no such breach of contract is proved by the assessee before the authorities below. The case laws, therefore, relied upon by the counsel for the assessee are not applicable to the fact of the case. Considering the above discussion, we do not find any justification to interfere in the order of the authorities below. We uphold their findings and dismiss the appeal of the assessee on this ground. As a result, the addition of Rs. 16,92,160 is confirmed. No other issue is argued or pressed.
21. As a result, the appeal of the assessee is partly allowed.