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"4.2 The fats of the case are that the appellant and its group concerns have claimed /declared below mentioned loss/profit in the transaction of sale & purchases within the group companies. Gujarat Ambuja Exports Ltd. Rs.45,60,792/- (loss) Gujarat Ambuja Proteins Ltd. Rs.98,78,546/- (loss) Gujarat Ambuja Cotspin Ltd., Rs.1,44,39,338/- (Profit) The loss claimed by the appellant company and Gujarat Ambuja Proteins Ltd. has been disallowed in the respective assessments on the ground that the transactions within the group are' non-genuine and on paper only, For the same reasons^ the income declared by Gujarat Ambuja Cotspin Ltd. has been held in its assessment order to be not proved from these transactions hut taxed as income from other sources. In the appellant's case the facts of the case and the reasons for the disallowance have been dealt with in detail by the Assessing Officer on pages 3,4 and 5 of the assessment order. The I.T.A.No. 1860,1944/Ahd/2000 I.T.A.No.1538,1539,1964,1965/Ahd/2009 Assessing Officer while disallowing the loss in respect of transactions in SOYA DOC has followed the directions of the DCIT u/s 144A given by the DCIT in respect of transactions in Wheat, losses suffered by the appellant from which are also subject matter of this appeal in ground No.5. The loss on transactions in SOYA DOC has been disallowed for the reasons summarily mentioned below :-

3.1.3 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that this issue was decided by Ld. CIT(A) as per para 4.5.1 to 4.5.6 and 4.6 of his order which are reproduced below:

"4.5.1 I have considered the facts of the case, the observations of the Assessing Officer in the assessment order as well as in his remand report and the submissions of the appellant- company very carefully. It is true that the transactions of SOYA DOC are amongst the group companies arid on such transactions I.T.A.No. 1860,1944/Ahd/2000 I.T.A.No.1538,1539,1964,1965/Ahd/2009 the appellant-company has shown to have incurred a loss of Rs. 45,60,792/- and Gujarat Ambuja Cotspin Ltd. has shown a profit on such transactions. It is also true that the profit earned by Gujarat Ambuja Cotspin Ltd. has been shown in its balance sheet as well as in the return of income for the very same assessment year. All these three companies i.e. the appellant company, Gujarat Ambuja Cotspin Ltd. and Gujarat Ambuja Proteins Ltd. are assessed by the same assessing Officer. The main contention of the A.O. while disallowing the loss is that these transactions are found to be non-genuine and on paper only. He has further stated that the transactions are with a view to reduce the taxable income. He has placed heavy reliance on the directions issued u/s 144A, pertaining to trading in wheat by the group concerns because according to him the impugned transactions in SOYA DOC are identical with that of trading in wheat in assessment year 91-92 wherein the issue has already been decided against the company in the case of Gujarat Vita Pharma Ltd.
4.5.2 Coming to the impugned transactions as it is, it is clear that the respective companies hove recorded in their books of account, the impugned transactions, the shareholders of the companies have approved the accounts/ which include the impugned transactions of purchase and sale or each of the three companies and the payments for the purchase by the respective companies have been made by account payee cheques and recorded in their books of accounts. This is supported by the copies of accounts of Gujarat Ambuja Proteins Ltd- and Ambuja Agro Industries Ltd. which were filed and are placed on page Nos. 153 to 169 and 203 to 206 of the paper book. These are the two parties from whom the impugned purchases of Soya DOC were made by the appellant company. Copy of accounts of Gujarat Ambuja Cotspin Ltd. was also filed, which is placed on page Nos. 179 to202 of the paper book, to whom soya DOC was sold by the appellant company. Copy of the sales tax assessment order has also been made available at page No.147 to 152 of the paper book. From these documents, it is absolutely clear that the transactions are duly recorded in the books of accounts of the respective companies, they have? 'been followed by actual payments and they are also shown in the sales tax returns filed by the appellant company. sales tax returns also provide independent contemporary evidence of genuineness of the transactions Thus it. can not be said that the transactions were only on paper as claimed by the I.T.A.No. 1860,1944/Ahd/2000 I.T.A.No.1538,1539,1964,1965/Ahd/2009 Assessing Officer. Not only this, xerox of the purchase book pertaining to SOYA DOC sales book as well as stock register were also made available, which are placed on pages Nos. 62 to 146 of the paper book. From the perusal of the said documents, it is absolutely clear that the transactions are also recorded in the sales and purchases registers as well as in the stock register. In the stock register the date wise position of stock in quantity of SOYA DOC is also indicated, from a perusal of which it is clear that on the date of sale there were sufficient quantities available with the appellant company. It is also important to note here that all these documents were sent to the A.O. but in his remand - report, he has simply reiterated his arguments as made in the assessment order that such transactions are only on Paper, which is not correct in view of above mentioned facts and documentary evidences.
4.5.3 Coming to the directions of the DCIT u/s 144A of the Act on the basis of which the loss has been disallowed by the A.O. my attention was drawn to the said directions, placed on page Nos. 208 to 209 of the paper book, from which it is absolutely clear that the said directions were issued by the DCIT, pertaining to trading in wheat by the concerns of the group and the same was not pertaining to the transactions in SOYA DOC. Moreover, the amounts of profit and loss mentioned in the said directions were also pertaining to wheat and not pertaining to SOYA DOC. Since the disallowance of loss in the trading of wheat has also been challenged by the appellant in this appeal, this issue is separately considered in this appellate order, and, has been discussed in para 5.5 relating to loss on transactions in wheat as has been held in this para, even in respect of wheat, the facts of the case and the transactions in assessment year 1993-94 are materially different from the facts of the case and the transactions in wheat in assessment year 1991-92 in Gujarat vita Pharma Ltd. In fact, I nay 1993-94, the facts of the case and the transactions are similar in wheat and SOYA DOC as has also been held by the A.O.. therefore, the A.O. was wrong in relying upon assessment order and appellate order for assessment year 1991-92 in the case of Gujarat Vita Pharma Ltd., for disallowing the impugned loss. 4.5.4 One of the observations of the A.O. was that such transactions were done with a view to reduce the taxable income. For this, a specific query was raised to the authorized I.T.A.No. 1860,1944/Ahd/2000 I.T.A.No.1538,1539,1964,1965/Ahd/2009 representative of the appellant in response to which my attention was drawn to the submission dated 22nd December, 1997, which has been filed during the course of appeal hearing. It was the claim of the appellant that these transaction were not with any intention to reduce the taxable income as is clear from the fact that even by ignoring the loss and the profit in SOYA DOC and wheat, the taxable income of all the four group companies taken together will be increased only by an amount of Rs.25,979/-, which will have a tax effect of only Rs.13,446/- @ 51.75%, including surcharge. This was because the returned income, which was after considering the transactions in SOYA DOC and wheat, was for the positive income and even if the profit /loss on such transactions are ignored there remains taxable income with a minor change of Rs.25,979/- due to negative other income in the case of Gujarat Vita Pharma Ltd. Thus the argument of the A.O. that these transactions were with a view to reduce the taxable income finds no support from the factual position.