Principle of fraud applies on failure to establish why shops were sold at loss to partners

Arihant Moti Developers Vs ITO (ITAT Pune) ITAT Pune held that as the assessee failed to establish why the shops were sold at loss to the partners and interest persons, principle of fraud squarely gets applicable. Accordingly, disallowance of loss duly justified. Facts- The assessee firm is engaged in the business of builders and developers. On verification of the P & L account, it was seen that the assessee had shown total sales of Rs. 10,16,24,773/- and has shown net loss of Rs. 8,50,05,404/-. It was observed that the loss was mainly due to sales made below the cost price. On verificatio...