Vam Airtex Pvt.Ltd.,, Ahmedabad v. The Income tax Officer, Ward-8(4),, Ahmedabad

ITA 69/AHD/2008 | 1991-1992
Pronouncement Date: 30-04-2015 | Result: Allowed

Appeal Details

RSA Number 6920514 RSA 2008
Assessee PAN TOBER2007P
Bench Ahmedabad
Appeal Number ITA 69/AHD/2008
Duration Of Justice 7 year(s) 3 month(s) 27 day(s)
Appellant Vam Airtex Pvt.Ltd.,, Ahmedabad
Respondent The Income tax Officer, Ward-8(4),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-04-2015
Date Of Final Hearing 29-04-2015
Next Hearing Date 29-04-2015
Assessment Year 1991-1992
Appeal Filed On 03-01-2008
Judgment Text
I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S.S. GODARA JM] I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 VAM AIRTEX PRIVATE LIMITED .................... .APPELLANT 5/15 VASUPUJYA CHAMBERS ASHRAM ROAD AHMEDABAD VS. INCOME TAX OFFICER WARD 8(4) AHMEDABAD ...RESPONDEN T APPEARANCES BY: S N DIVATIA FOR THE APPELLANT A L KUREEL AND DINESH SINGH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : APRIL 29 2015 DATE OF PRONOUNCING THE ORDER : APRIL 30 2015 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 3 RD OCTOBER 2007 PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 AND 250 OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 1991 -92. 2. GRIEVANCE OF THE ASSESSEE IN SUBSTANCE IS THAT THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS 5 16 480 IN RESPEC T OF THE ALLEGED LOSS DUE TO EMBEZZLEMENT SUFFERED BY THE ASSESSEE. 3. TO ADJUDICATE ON THIS APPEAL ONLY A FEW MATERIA L FACTS NEED TO BE TAKEN OF. IT IS A REOPENED ASSESSMENT AND THE SECOND ROUND OF PROCEEDINGS BEFORE US. THE ASSESSEE BEFORE US IS A COMPANY ENGAGED IN THE BUSI NESS OF MANUFACTURING I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 2 OF 8 REPAIRING AND RENDERING SERVICES IN CONNECTED WITH AIR CONDITIONERS. THE ORIGINAL ASSESSMENT WAS REOPENED ON THE BASIS OF CE RTAIN INQUIRIES CARRIED OUT BY THE DDIT (INVESTIGATION) WHICH INDICATED THAT TH E COMPANY HAD BOOKED BOGUS PURCHASES RESULTING IN SUPPRESSED PROFITS THAT SOM E CONCERNS USED FOR THE PURPOSES OF BOOKING THESE BOGUS PURCHASES WERE OWNE D BY THE EMPLOYEES AND ASSOCIATES OF THE ASSESSEE AND THAT SOME CONCERNS WERE CREATED TO ROUTE UNACCOUNTED SALES OF THE AIR CONDITIONERS MANUFACTU RED OR ASSEMBLED BY THE ASSESSEE. THESE FINDINGS WERE BASED ON INTER ALIA STATEMENT OF ONE K B THAKKAR RECORDED BY THE DDIT AND IT WAS THIS STATEMENT WHIC H WAS FOUNDATIONAL MATERIAL SUPPORTING THE ALLEGATION OF BOGUS PURCHASES. THE CASE AGAINST THE ASSESSEE THUS WAS THAT A PART OF THE PURCHASES BOOKED IN THE ACCOUNTS OF THE ASSESSEE WAS BOGUS PURCHASES AND THE PAYMENTS MADE BY THE ASSESS EE BY CHEQUES WERE RETURNED TO THE ASSESSEE IN CASH. THE ASSESSEE HAD REPUDIATED THESE ALLEGATIONS AND POINTED OUT THAT THIS K B THAKKAR WAS ACTING MALAFIDE THAT EVEN IF ANY PART OF THE PURCHASES WAS BOGUS SO FAR AS THE ASSESSEE WAS CONCERNED THE PAYMENTS WERE DULY MADE BY THE ASSESSEE AND IT IS INCORRECT THAT THE ANY PART OF THESE PAYMENTS CAME BACK TO THE ASSESSEE. IT WAS ALSO CON TENDED THAT SO FAR AS THE ALLEGED BOGUS PURCHASES WERE CONCERNED THE ASSESSE E HAD MADE THE PAYMENTS AND THE MONEY SO PAID WERE TO MADE TO CERTAIN CONCE RNS OWNED AND MANAGED BY K B THAKKAR BY K B THAKKAR HIMSELF WHO WAS MANA GING AFFAIRS OF THE ASSESSEE COMPANY. THE LOSS CORRESPONDING TO THESE B OGUS PURCHASES WAS THUS CAUSED TO THE ASSESSEE AS PER THE ASSESSEE BY MIS APPROPRIATION OF FUNDS BY K B THAKKAR. THE ASSESSEE CLAIMED THE DEDUCTION IN RESP ECT OF SUCH LOSS WHICH SO FAR AS THIS ASSESSMENT YEAR WAS CONCERNED WAS RS 5 16 480. WHEN THE MATTER REACHED THE TRIBUNAL A COORDINATE BENCH OF THIS TR IBUNAL VIDE ORDER DATED 11 TH NOVEMBER 2005 REMITTED THE MATTER BACK TO THE ASSE SSING OFFICER FOR FRESH ADJUDICATION AFTER FURNISHING A COPY OF K B THAKKA RS STATEMENT BEFORE THE DDIT TO THE ASSESSEE. 4. IN THE RESULTANT ASSESSMENT PROCEEDINGS THE ASS ESSING OFFICER INTER ALIA DECLINED THE CLAIM OF DEDUCTION FOR THE LOSS DUE TO EMBEZZLEMENT ON THE GROUND THAT THAT AS HELD IN THE FIRST ROUND OF PROCEEDING S THE CIRCUMSTANCES UNDER WHICH THE LOSS HAD ARISEN CANNOT BE SAID TO BE IN T HE NORMAL COURSE OF BUSINESS I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 3 OF 8 THAT NO NEW MATERIAL HAS BEEN BROUGHT ON RECORD TO SUPPORT THE CLAIM OF DEDUCTION THAT EVEN IF LOSS IS ACCEPTED TO HAVE AR ISEN IT COULD BE ALLOWED AS DEDUCTION ONLY WHEN IT IS IRRECOVERABLE WHEREAS RIG HT NOW MATTER IS SUB JUDICE AND THE EMBEZZLED MONIES EVEN IF ANY CANNOT BE SA ID TO BE FULLY UNRECOVERABLE. A REFERENCE WAS THEN MADE TO THE FINDINGS IN THE FI RST ROUND OF PROCEEDINGS WHEREIN IT WAS SAID TO HAVE BEEN HELD THAT THE ASSE SSEE WAS ALL ALONG AWARE ABOUT THE BANK ACCOUNTS WHICH WERE ALLEGEDLY USED F OR EMBEZZLEMENT AND THAT IT IS UNBELIEVABLE THAT THE COMPANY WENT ON ISSUIN G CHEQUES WHICH ARE MENTIONED IN MISAPPROPRIATION WITHOUT GETTING THE AMOUNT BACK IN CASH. A REFERENCE WAS ALSO MADE TO THE OBSERVATION MADE BY THE COORDINATE BENCH IN ORDER DATED 11 TH NOVEMBER 2005 TO THE EFFECT THAT THE FACT REMAINS THAT THE NAME OF THE ASSESSEE APPEARS IN THESE DUBIOUS TRANS ACTIONS. THE CLAIM OF DEDUCTION ON ACCOUNT OF EMBEZZLEMENT WAS THUS DECLI NED. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. WHILE REJECTING THE CONTENTIONS OF THE ASSESSEE LEARNED CIT(A) HELD AS FOLLOWS: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUB MISSIONS OF THE APPELLANT. I DONOT AGREE WITH THE VIEWS OF THE APPE LLANT. I FIND THAT THE AO HAS GIVEN PROPER OPPORTUNITY OF BEING HEARD AS ALSO GIVEN COPIES OF THE STATEMENTS RECORDED EARLIER AND PAPER BOOK FILED AS DIRECTED BY THE HONBLE ITAT. HENCE THE APPELLANT S SUBMISSION IN THIS REGARD IS REJECTED. FURTHER FROM THE DISCUSSI ONS MADE BY THE AO IN THE ASSESSMENT ORDER AND THE FACTS GATHERED IT IS CLEAR THAT THERE WERE BOGUS PURCHASES CLAIMED BY THE APPELLANT FOR W HICH DISALLOWANCE WAS CALLED FOR. THE APPELLANTS CONTEN TION THAT IF ANY ADDITION IS TO BE MADE SIMULTANEOUSLY DEDUCTION SH OULD BE ALLOWED FOR CASH EMBEZZLEMENT AS BUSINESS LOSS IS NOT ACCE PTABLE BECAUSE THE CLAIM OF LOSS BY EMBEZZLEMENT PUT FORTH BY THE APPELLANT IS NOT CONVINCING. THE ASSESSEE HAD KNOWLEDGE OF BOGUS BAN K ACCOUNTS OPENED IN THE NAME OF DIFFERENT EMPLOYEES TO ACCOMM ODATE INFLATION OF PURCHASES IN ITS ACCOUNTS. FACT REMAINS THAT THE AMOUNT BEING DEPOSITED IN THESE BANK ACCOUNTS OPENED IN THE NAME OF THE EMPLOYEES WERE BEING WITHDRAWN FROM TIME TO TIME AN D BEING HANDED OVER TO SVS (SUNIL V SHAH A DIRECTOR OF THE COMPANY) AS STATED BY THE KBT (K B THAKKAR A FORMER BUSINESS ASSOCIATE WHO WAS S AID TO BE HANDLING ALL THE ACCOUNTS AND TAX MATTERS AND WHO H AD GIVEN A STATEMENT AGAINST THE ASSESSEE) WHICH WAS A CONTINUOUS PROCESS. IT CANNOT BE SAID THAT TH ASSESSEE COMPANY KEPT ON ISSUING CHEQU ES TO THE EMPLOYEES BANK ACCOUNTS WITHOUT RECEIPT OF CASH IN RETURN. HAD IT BEEN SO THE ASSESSEE COMPANY WOULD NOT HAVE ISSUE D CHEQUES ONCE THE AMOUNT WAS WITHDRAWN BY THE ASSESSEE WERE NOT R ECEIVED BACK I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 4 OF 8 BY SVS BECAUSE SVS WAS FULLY AWARE OF THE FACT THAT THE ACCOUNTS WERE BOGUS AND THE FOR THE SPECIFIC PURPOSES OF INFLATIN G THE PURCHASES. THE ASSESSEE COMPANYS PLEA I.E. IGNORANCE ABOUT T HE ENTRIES MADE IN THE BOOKS OF ACCOUNTS ALSO WAS FOND NOT SOUND A ND CONVINCING IN THE SENSE THAT THE ASSESSEE COMPANY WAS FULLY AWARE OF THE FACT THAT CHEQUES BEING DEPOSITED INTO ACCOUNT WHICH WAS INTR ODUCED BY ITS OWN DIRECTOR. OTHERWISE ALSO THE BOOKS WHERE THE E NTRIES WERE MADE WERE IN POSSESSION OF THE COMPANY EVEN AFTER T HE ENTRIES HAVE BEEN MADE. STATEMENT OF GAUTAM DALAL WHO HAPPENED TO BE AN EMPLOYEE OF THE COMPANY CORROBORATED THIS. IN VIEW OF THE ABOVE DISCUSSIONS ALL THE GROUNDS O F APPEAL ARE HEREBY REJECTED. 5. THE ASSESSEE IS AGGRIEVED OF THE STAND SO TAKEN BY THE CIT(A) AND IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSTION. 7. WE HAVE NOTED THAT IN THIS ROUND OF PROCEEDINGS ALSO THE ASSESSING OFFICER HAS HEAVILY RELIED UPON FINDINGS IN THE FIR ST ROUND OF PROCEEDINGS AND PROCEEDED TO ADOPT THE SAME AS THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY NEW MATERIAL AND THEREFORE AS PER THE ASSESSING OFFI CER THESE FINDINGS HAVE REACHED FINALITY. THIS APPROACH IS CLEARLY FALLACIO US. WHEN THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THE FIRST ROUND HAS BEEN REMITTED TO THE FILE OF THE ASSESSING OFFICER BY THE COORDINATE BENCH O N THE GROUND THAT IT HAS BEEN PASSED WITHOUT CONFRONTING THE ASSESSEE WITH THE CE RTAIN STATEMENTS RECORDED BY THE INVESTIGATION WING ALL THE FINDINGS IN THAT ASSESSMENT ORDER CANNOT BE TREATED TO HAVE ACHIEVED FINALITY. THERE WAS NO OCC ASION FOR THE TRIBUNAL TO ADJUDICATE ON THESE FINDINGS AS THE ASSESSMENT ORDE R WAS HELD TO BE VITIATED IN LAW ON ACCOUNT OF VIOLATION OF THE PRINCIPLES OF NA TURAL JUSTICE INASMUCH AS THE ASSESSEE WAS NOT CONFRONTED WITH THE MATERIAL WHICH WAS USED AGAINST THE ASSESSEE. THE RESULT OF PROCEEDINGS IN THE FIRST RO UND EXCEPT THE VALIDITY OF REASSESSMENT WHICH WAS SPECIFICALLY HELD TO BE LEGA LLY SUSTAINABLE CASES TO HOLD GOOD IN LAW WITH THE MATTER HAVING BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER. THE TRIBUNAL HAS NOT CONFIRMED ANY PART OF THE ORDER NOR HAS THE TRIBUNAL DEALT WITH THE MERITS OF THE MATTER. THERE CANNOT BE A DEEMED APPROVAL I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 5 OF 8 OF ANY FINDINGS OF THE AO OR THE CIT(A) WHEN THE TR IBUNAL HAS NOT EVEN EXAMINED THAT ASPECT OF THE MATTER. THERE IS NO MAT ERIAL BEFORE US TO COME TO A DEFINITE CONCLUSION AS HAS BEEN ARRIVED BY THE CIT (A) THAT THE ASSESSEE HAD FULL KNOWLEDGE OF THE BANK ACCOUNTS BEING USED TO SIPHON FUNDS AND FOR BOOKING BOGUS PURCHASES AND THAT THE ASSESSEE OR SUNIL V SH AH WERE INVOLVED IN RECEIVING CASH IN LIEU OF THE CHEQUES ISSUED BY THE ASSESSEE. A STATEMENT HAVING BEEN GIVEN BY AN INDIVIDUAL WHICH STATES SO CANNO T BE TREATED AS THE LAST WORD BECAUSE AS A MATTER OF RECORD THE ASSESSEE HAS MA DE COUNTER ALLEGATIONS IN CIVIL AND CRIMINAL PROCEEDINGS. THERE HAS TO BE SOMETHING MORE THAN AN ALLEGATION TO COME TO A DEFINITE CONCLUSION IN THIS REGARD. THE S TATEMENT OF K B THAKKAR IS UNDOUBTEDLY AN IMPORTANT PIECE OF DOCUMENT BUT SUC H A STATEMENT PER SE CANNOT BE CONCLUSIVE TO DECIDE THE ISSUE AGAINST TH E ASSESSEE. ALL THE SURROUNDING FACTORS INCLUDING STAND OF THE ASSESSE E AS ALSO THE PROCEEDINGS INITIATED BY THE ASSESSEE AS INDEED THE CIRCUMSTAN CES UNDER WHICH SUCH PROCEEDINGS ARE INITIATED AND THE ALLEGATIONS OF K B THAKKAR ARE ALSO TO BE EXAMINED IN A HOLISTIC MANNER TO COME TO A CONCLUSI ON ON THIS ISSUE. AS FOR THE REFERENCE HAVING BEEN MADE TO THE OBSERVATION MADE BY THE COORDINATE BENCH IN ORDER DATED 11TH NOVEMBER 2005 TO THE EFFECT THAT T HE FACT REMAINS THAT THE NAME OF THE ASSESSEE APPEARS IN THESE DUBIOUS TRANS ACTIONS IT IS IMPORTANT TO APPRECIATE THAT IT WAS IN THE CONTEXT OF VALIDITY O F REOPENING AND AT THE COST OF REPETITION WE HAVE TO POINT OUT THAT THE COORDINAT E BENCH HAD NO OCCASION TO EXAMINE MERITS OF THE CASE AT ALL. THIS ASPECT WILL BE ALL THE MORE CLEAR WHEN THE ENTIRE RELEVANT OBSERVATION OF THE TRIBUNAL IS READ TOGETHER. THIS OBSERVATION IS AS FOLLOWS: WE HAVE HEARD THE PARTIES AT LENGTH REGARDING THE I SSUE OF REOPENING OF ASSESSMENT AND VIOLATION OF PRINCIPLES OF NATURA L JUSTICE. FIRST WE SHALL DEAL WITH THE PLEA OF THE LEARNED COUNSEL THA T REASSESSMENT PROCEEDINGS ARE BAD IN LAW. WE ARE UNABLE TO AGREE WITH THIS PROPOSITION OF THE LEARNED COUNSEL AS SUFFICIENT (FOR THE PURPOSE OF REOPENING THE ASSESSMENT) MATERIAL HAS COME ON THE RECORD TO COME TO A REASONABLE BELIEF THAT THE ASSESSEE WAS INDULGING IN BOGUS PURCHASES. WHETHER IT WAS AT THE BEHEST OF THE ASSE SSEE OR NETWORK OF AN EMPLOYEE THAT IS ALTOGETHER A DIFFERENT ASPE CT (BUT THE) FACT REMAINS THAT THE NAME OF THE ASSESSEE APPEARS IN TH ESE DUBIOUS TRANSACTIONS. THIS INFORMATION THOUGH MAY BE AVA ILABLE FOR A I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 6 OF 8 PARTICULAR PERIOD BUT LOOKING AT THE SYSTEM A REASO NABLE BELIEF CAM BE FORMED THAT BOGUS PURCHASES MAY BE THERE IN ALL THESE YEARS. IN VIEW OF THESE OBSERVATIONS WE UPHOLD THE REOPENING OF THE ASSESSMENTS. 8. THE COORDINATE BENCH THEN PROCEEDS TO EXAMINE TH E ISSUE OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE ABOVE OBSERVATIO N IS IN THE CONTEXT OF REOPENING AND IN OUR HUMBLE UNDERSTANDING THIS O BSERVATION CANNOT BE PUT AGAINST THE ASSESSEE ON MERITS. THERE ARE NO INDEPE NDENT FINDINGS IN THE IMPUGNED ASSESSMENT ORDER OR THE ORDER OF THE CIT(A ) BUT YET THE CIT(A) PROCEEDS ON THE BASIS THAT THE ASSESSEE WAS FULLY A WARE OF THE BOGUS PURCHASES AND DUBIOUS TRANSACTIONS BUT THEN AS POINTED OUT E ARLIER THERE IS NO INDEPENDENT FINDING ABOUT THE REASONS OF PROCEEDING ON THIS BASIS. THE CIT(A) CANNOT SIMPLY REFER TO THE FINDINGS IN THE FIRST RO UND OF PROCEEDINGS AND DECIDE THE MATTER IN THE LIGHT OF THESE FINDINGS BECAUSE IN SUCH A SITUATION THE TRIBUNAL WILL NOT HAVE ANY OPPORTUNITY OF EXAMINING CORRECTNESS OF THE STAND TAKEN BY THE ASSESSING OFFICER. THE FINDING OF THE AUTHORITIES BELOW SHOULD BE THROUGH A SPEAKING ORDER AND WITH APPROPRIATE REFE RENCE TO THE MATERIAL ON THE BASIS OF WHICH SUCH FINDINGS ARE BASED SO THAT THE SE FINDINGS CAN BE EXAMINED ON THE STANDALONE BASIS. IT IS ALSO A MATTER OF RE CORD THAT THE ASSESSEE HAS INITIATED CERTAIN CIVIL AND CRIMINAL PROCEEDINGS BU T THESE PROCEEDINGS HAVE NOT REACHED FINALITY AS YET. NONE OF THE AUTHORITIES BE LOW HAS DEALT WITH OR ANALYSED ANY OF THESE DOCUMENTS. WE HAVE ALSO NOTED THAT DU RING THE COURSE OF THE PROCEEDINGS BEFORE US IT WAS VEHEMENTLY CONTENDED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT EITHER THE INCOME SHOULD BE TAXED IN THE HANDS OF THE PERSON WHO IS ALLEGED TO HAVE EMBEZZL ED THE MONIES OR DEDUCTION FOR THE EMBEZZLEMENT SHOULD NOT BE ALLOWED IN THE C ASE OF THE ASSESSEE. WE ARE UNABLE TO SEE ANY LEGALLY SUSTAINABLE MERITS IN THI S OBJECTION. WHETHER OR NOT AN AMOUNT IS BROUGHT TO TAX IN THE HANDS OF THE PERSON WHO IS ALLEGED TO HAVE OR HAS ACTUALLY EMBEZZLED THAT AMOUNT CANNOT BE DETER MINATIVE OF THE DEDUCTION IN THE HANDS OF THE PERSON SUFFERING THE LOSS. THER E CAN BE SEVERAL REASONS WHOLLY UNRELATED TO THE GENUINENESS OF EMBEZZLEMENT LOSS WHICH MAY RESULT IN NON-TAXABILITY OF INCOME IN THE HANDS OF THE BENEFI CIARY OF SUCH A CRIMINAL ACTIVITY AND THEREFORE SUCH A NON-TAXABILITY BY ITSELF CANNOT BE REASON ENOUGH I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 7 OF 8 TO DECLINE THE DEDUCTION IN THE HANDS OF THE PERSON SUFFERING THE EMBEZZLEMENT LOSS. THE PLEA CANVASSED BY THE LEARNED DEPARTMENTA L REPRESENTATIVE HOWSOEVER APPEALING IT MAY SEEM TO BE AT THE FIRST SIGHT ON THE GROUND OF EQUITY LACKS LEGALLY SUSTAINABLE MERITS. WE MAKE IT CLEAR THAT THE TAXABILITY OR NON- TAXABILITY OF INCOME ON ACCOUNT OF EMBEZZLEMENT EV EN IF ANY IN THE HANDS OF THE PERSON WHO IS ALLEGED TO HAVE OR HAS ACTUALLY EMB EZZLED THE MONEY WILL NOT HAVE ANY BEARING ON THE DEDUCTIBILITY OF THIS LOSS IF OTHERWISE ADMISSIBLE IN THE HANDS OF THE ASSESSEE. IN VIEW OF THESE DISCUSSION S IN OUR CONSIDERED VIEW THE ENTIRE ISSUE OF ADMISSIBILITY OF DEDUCTION IN RESPE CT OF ALLEGED EMBEZZLEMENT NEEDS TO BE CONSIDERED AFRESH IN A FAIR AND OBJECTI VE MANNER AND IN THE LIGHT OF RELATED LEGAL DEVELOPMENTS AS A RESULT OF CIVIL AND CRIMINAL PROCEEDINGS INITIATED BY THE DIRECTORS OF THE COMPANY AGAINST K B THAKKAR AND VICE VERSA . 9. AS THE VERY BASIC ISSUE OF ADMISSIBILITY OF DEDU CTION IN RESPECT OF THE LOSS DIE TO EMBEZZLEMENT IS REQUIRED TO BE IN THE LIGHT OF THE ABOVE DISCUSSIONS REQUIRED TO BE DECIDED AFRESH WE DONOT CONSIDER IT APPROPRIATE TO DEAL WITH OTHER PERIPHERAL ISSUES RAISED IN THE ORDERS OF THE AUTHORITIES BELOW. SUFFICE TO SAY THAT THE MATTER WILL BE DECIDED AFRESH UNINFLU ENCED BY THE FINDINGS IN THE FIRST ROUND OF PROCEEDINGS (WHICH HAVE COME TO A NA UGHT DUE TO THE MATTER HAVING BEEN RESTORED TO THE FILE OF THE ASSESSING O FFICER DUE TO THE PROCEEDINGS IN THE FIRST ROUND HAVING BEEN HELD TO BE VITIATED IN LAW DUE TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE) BY WAY OF A SPEAKIN G ORDER ON A STANDALONE BASIS AFTER TAKING INTO ACCOUNT ALL SUCH DOCUMENTS INCLU DING DOCUMENTS RELATING TO LEGAL PROCEEDINGS AS THE ASSESSEE MAY RELY UPON AN D AFTER GIVING A FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE CONSIDER IT APPROPRIATE TO CLARIFY THAT ON MERITS THE ASSESSEE IS AT LIBE RTY TO RAISE ALL SUCH ARGUMENTS AS HE MAY DEEM FIT AND PROPER. 10. FOR THE REASONS SET OUT ABOVE WE ONCE AGAIN RE MIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION DE NOVO IN TERMS OF OUR DIRECTIONS ABOVE INTER ALIA IN THE LIGHT OF THE LEGAL PROCEEDINGS IN RESPECT O F THE EMBEZZLEMENT THAT THE ASSESSEE CLAIMS TO HAVE SUFFE RED. WITH THESE DIRECTIONS THE MATTER STANDS RESTORED TO THE FILE OF THE ASSES SING OFFICER. I.T.A. NO. 69/AHD/08 ASSESSMENT YEAR: 1991-92 PAGE 8 OF 8 11. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH APRIL 2015. SD/- SD/- S. S. GODARA PRAMOD KUM AR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD THE 30 TH DAY OF APRIL 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPOND ENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT/DEPUTY REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD