AAKASH SUREKA,KOLKATA V. DCIT, CEN. CIR. 3(3), KOLKATA

ITSSA 27/KOL/2024

AI Insights

The case involves appeals by Aakash Sureka and Shivam Sureka against the orders of the Commissioner of Income Tax (Appeals) - Kolkata, which confirmed various additions made by the Assessing Officer (AO) for the assessment years 2014-15 and 2015-16. The main issues revolved around the treatment of commodity profits, speculation losses, and gifts received from an HUF. The Tribunal examined whether the profits from commodity transactions were genuine and whether the speculation losses could be set off against these profits. The Tribunal also considered the legal status of gifts received from an HUF under section 56(2) of the Income Tax Act, 1961. The Tribunal's decision was influenced by various precedents and the specific circumstances of the transactions and gifts in question.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298588 (ITAT-KOLKATA)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: PCIT vs. M/s BCB Cables and Contractors Pvt. Ltd., CIT vs. Prudent Finance Pvt. Ltd., ACIT vs. M/s R. K Commercial Ltd., Gyanchand M. Bardia vs. ITO, Vineet Kumar Raghavji Bhai Bhalodia vs. ITO, Ashok C Pratap vs. Addl. CIT, Saran Nayak vs. DCIT, Managing Trustee, Nagore Daraha vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Speculation loss; Business income; Unexplained cash credit; Capital receipt; Gift; Search and seizure; Maximum Marginal Rate; Bogus
• Section: 142(1); 143(2); 250; 56; 12AA; 153; 132; 68; 56(2); 43; 133(6); 12A; 13; 43(5); 101

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “ए’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.(S.S).A. Nos. 27 & 28/Kol/2024 Assessment Years: 2014-15 & 2015-16 Aakash Sureka (PAN: AUCPS 5656 G) Vs. DCIT, Central Circle-3(3), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ I.T.(S.S).A. Nos. 29/Kol/2024 Assessment Year: 2015-16 Shivam Sureka (PAN: AUCPS 5658 J) Vs. DCIT, Central Circle-3(3), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 11.02.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 16 .04.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Miraj D Shah, A. R For the revenue / राजèव कȧ ओर से Shri Subhendu Datta, CITDR 2 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka ORDER / आदेश Per Pradip Kumar Choubey, JM: These are the appeals preferred by the different assessees against the separate orders of Commissioner of Income Tax (Appeals)- Kolkata-21, Kolkata (hereinafter referred to as the Ld. CIT(A)] dated 07.03.2024 for AY 2014-15 to 2015-16 respectively. In all the three appeals, issues are more or less common, so taken up together for disposal by taking IT(S.S)A No. 27/Kol/2024 for AY 2014-15 being a lead case. 2. Brief facts of the case of the assessee are that a search and seizure operation u/s 132 of the Act was conducted at residential and office premises of Adhunik group of cases on 17 & 18/12/2014. A notice u/s 153 of the Act was issued for AY 2014-15 and in response to the said notice the assessee filed its return of income showing total income of Rs. 7,77,040/-. The case was selected for search assessment, notices u/s 143(2) and 142(1) were issued and in response to the same the Ld. A.R submitted documents. The AO after hearing the assessee and going over the documents filed by the assessee decided the four issued against the assessee which are as under: “1. AO observed that the appellant had not shown drawings during the year under consideration whereas he had reported drawings of Rs. 1.6 lakh in AY 2010-11. The AO estimated drawings @ Rs. 5000/- per month and added Rs. 60,000/-. 2. The AO observed that the appellant had set off speculation loss of Rs. 14,03,951/- for the AY 2011-12 against commodity profit of Rs. 21,26,328/- derived from transactions electronically through screen based system which was normal business profit u/s 43(5) of the Act. He disallowed the set off by stating that speculation loss is not eligible to be set off against normal business profit. 3. The AO, further, carried out investigation and found that the appellant didn’t carry out the transactions in commodity derivatives in the ICEX platform and therefore it was not a genuine profit to be assessed as business income. The AO forwarded the investigation result to the appellant and sought his explanation but the appellant didn’t comply. The AO added the amount of Rs. 21,96,328/- u/s 68 of the Act as unexplained cash credit. 3 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka 4. The AO finally observed that the appellant received a gift of Rs. 13,02,000/- from the HUF of his father. He considered the same as income of the appellant u/s 56(2) of the Act as the HUF was not covered under exemption to section 56(2).” 3. Aggrieved by the said addition the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed on all the additions made by the AO. Being aggrieved and dissatisfied with the impugned order the assessee preferred an appeal by taking the following grounds: i) That the order passed u/s 250 is bad in law as well as on facts of the case. ii) That the Hon’ble CIT(A) erred in law as well as in facts by confirming the action of the Ld. Assessing Officer by not allowing the speculation loss of Rs. 14,03,951/- to be set off against profit from trading in commodity derivatives. iii) That the Hon’ble CIT(A) erred in law as well as in facts by confirming the action of the Ld. Assessing officer by treating the amount of commodity profit of Rs. 21,96,328/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961. iv) That the Hon’ble CIT(A) erred in law as well as in facts by confirming the action of the Ld. Assessing Officer in making an addition of Rs. 13,02,000/- received from father’s HUF, Shri Anank Akash Sureka (HUF) u/s 56(2) of the Income Tax Act, 1961. v) That the appellant craves to leave, add or amend any of the grounds during the course of appellate proceedings. On perusal of the grounds of appeal taken by the assessee it appears that on merit the assessee did not file appeal against the addition of Rs. 60,000/- on account of drawing for personal expenses on estimated basis. Rather he challenges the order of the Ld. CIT(A) on addition of Rs. 14,03,951/- against the speculation loss, addition of Rs. 21,96,328/- u/s 68 of the Act and addition of Rs. 13,02,000/- u/s 56(2) of the Act. 4. The submission of the Ld. Counsel of the assessee is that the CIT(A) erred in confirming the order of AO on addition of Rs. 14,03,951 u/s 43(5) of the Act, ignoring the fact that the ld. AO admitted in this order that the exchange has confirmed that the transaction has not been carried out on their platform, being one of the essential ingredients to invoke Section 43(5) of the Act. The Ld. A.R has further submitted that 4 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka all the transactions were done through banking channels, the assessee has received ledger from broker and relevant contract note for making the transaction, so treated the transaction is bogus merely because the transaction was not confirmed by the exchange is erroneous and bad in law. The Ld. Counsel referred the explanation 2 to Section 43 sub-clause (5) of the Act and submitted that in view of the above section eligible transaction made with recognized association can only be treated as non-speculative transaction, though in the present case the AO has himself confirmed that such transaction has not been carried out on any recognized platform. The Ld. Counsel further submits that there are no rules, regulations and legal terms and condition which states that off market transaction needs to be reported to the exchange. The Ld. AR cited following decisions: i) PCIT vs. M/s BCB Cables and Contractors Pvt. Ltd. passed by the Hon’ble Calcutta High Court. ii) CIT vs. Prudent Finance pvt. Ltd. [2014] taxmann 125 (Guj-HC) iii) ACIT vs. M/s R. K Commercial Ltd. in ITA No. 1330/Kol/2014 The further submission of the ld. Counsel for the assessee on the issue of addition of Rs. 13,02,000/- u/s 56(2) is that the assessee received the same amount by way of gift from his father being member of Hindu undivided family and in the Hindu Undivided family all the persons shall come within the definition of relatives. He has cited the decision passed in ITAT, Ahmedabad Bench in Gyanchand M. Bardia vs. ITO reported in [2022] 3 TMI 1243. 5. Contrary to that the Ld. D.R supports the impugned order. 6. Heard the submission of the ld. Counsel of the respective parties and perused the records and grounds of appeal. On perusal of the grounds of appeal there is no denying to this fact that the assessee did not raise objection on the addition of Rs. 60,000/- made by the AO by estimating the amount of drawing relating to day-to-day expenses. Hence 5 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka we are not going to adjudicate the issue being not raised by the assessee. Accordingly, this issue goes against the assessee. 7. So far, the other issues are concerned, we find that the Ld. CIT(A) has dismissed the grounds of assessee on speculation loss and addition u/s 68 of the Act by treating that the transaction was bogus, so we take up both the issues together. In the present case, during the FY 2013-14 the assessee had earned commodity income of Rs. 21,96,328/- through its broker namely M/s Sairam Commodities Trade Pvt. Ltd. At the time of assessment proceedings, the AO issued notice u/s 133(6) to exchange but the exchange confirmed that the transaction was not carried out through their platform. Considering the above information, the AO treated the commodity income earned by the assessee as bogus. It is pertinent to mention here that the assessee submitted copies of contract notes from M/s Sairam Commodities Trade Pvt. Ltd. showing transaction using the platform of Indian Commodity Exchange of India Limited (ICEX). The assessee has set off his earlier speculation loss of Rs. 14,03,951/- for AY 2011-12. The AO has himself given a finding in its order that the exchange has informed that such transaction has not been carried out on their platform. Coming to the section 43(5) explanation 2 of the Act that deals: -e) an eligible transaction in respect of trading in commodity derivatives carried out in a recognized association shall not be deemed to be speculative transaction. It is further important to mention here that all the transaction through the broker were duly recorded in the books of the assessee. The broker has also declared in its books of account and offered for taxation. The AO did not find any defects in the evidences submitted by the assessee. It is also important to mention here that AO did not find any material that goes to say that broker of the assessee is involved any suspicious activities. Now going over the cited decision of the assessee, we find that the Hon’ble Gujarat High Court in CIT vs. Prudent Finance Pvt. Ltd. (supra) has held thus: “Business Loss- Allowability Genuineness of loss on off market transactions- Assessee company found to be treated in off market share transactions with its related group of persons as well as with unrelated groups of persons. AO disallowed losses on impugned transactions by simple purchase bills or sales bill ignoring market rates. This done to avoid tax. Moreover, neither any amount was paid nor any shares were transferred in the name of purchasers, only 6 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka account entries were made. Held: Necessary entries were made in the account books of both sides i.e. purchaser and seller and delivery receipts were also passed demonstrating contemporaneous sale and purchase of the shares. It was not even the case of the Revenue that such off market transactions were not permissible. When off market transactions were permitted in law, and there was no evidence to suggest that artificially they were sold at rates lower than the prevailing market rates and AO could not bring on record any material to show that the transactions were not genuine, the findings of Ld. CIT(A) as well as Tribunal that impugned transactions were genuine, called for no interference.” Further the Hon’ble ITAT, Kolkata in the case of M/s R. K. Commercial Ltd. (supra) has held thus: “9. To conclude: When the transaction which has been concluded within four corners of Law cannot be treated as colorable device unless the revenue brings any material to prove such an allegation. In this case, as will appear from the aforesaid details and documents filed, the price at which the shares were sold had not been not only intimated to the SEBI but even to Calcutta Stock Exchange both by the Acquirer and seller. It is an accepted fact that whenever share in the Stock Exchange are sold as off market transaction, it is sold at the intrinsic value of shares and that is what has happened in this assessee’s case under consideration. When purchase and sale of shares were supported by proper contract notes, deliveries of shares were received, the shares were purchased and sold through recognized broker and the sale considerations were received by account payee cheques, the transactions cannot be treated as bogus.” 8. In view of the discussion made above as well as going over the cited decision, we can be said that commodity income made by the assessee cannot be treated as a bogus as there is no rules, regulations which states that the off market transaction needs to be reported to the exchange. As a result of, the order passed by the AO confirmed by the Ld. CIT(A) on speculation loss as well as addition u/s 68 of the Act cannot be said to be legal. Accordingly, the same is hereby directed to be deleted. 9. The next point with regard to the addition of Rs. 13,02,000/- made u/s 56(2) of the Act is concerned we find that during the year under consideration the assessee received gift of the above amount from M/s Anand Akash Sureka, being the father and a member of Hindu undivided family. The AO disallowed by upholding that the father did not come under the definition of relatives. The submission of the assessee is that family was HUF and each of HUF family members have a separate legal status so the father should be considered as a relative. In this aspect we have gone through the cited decision filed by the assessee passed in ITAT, Ahmedabad Bench in Gyanchand M. Bardia vs. ITO (supra) and the relevant portion of this order is herein below: 7 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka “11.1 Further, we find that the decision of the ITAT Chandigarh Bench in the case of Pankil Garg (supra) has dealt with the issue in a totally different perspective, from the standpoint of the different aspects of Hindu Undivided Family and has held that as per the Hindu Law every member of HUF has a pre-existing right in the property of the HUF and any amount given to a member therefore from the HUF property tantamounts to only giving him what actually belonged to him and there is no question therefore of the same being any amount given for no consideration or in the nature of gift, which are covered in the scope of Section 56(2)(vii) of the Act. The relevant findings of the ITAT in the said case are as under: \" 8.Now coming to the findings of the Ld. PCIT that as per the provisions of section 56 (2)(vii) of the Act, though the members of the 'HUF' are to be taken relatives of the 'HUF' for the purpose of the said section, however, the converse is not true that is to say that 'HUF' is not a relative of the individual Shri Gyanchand M. Bardia vs. ITO member as per meaning of relative given in the case if individual under explanation to section 56(2)(vii) of the Act. Before further deliberating on this question, we deem it necessary to first discuss as to what constitute 'HUF' (Hindu Undivided Family). The 'HUF' has been included within the meaning of word 'person' in section 2(31) of the Income Tax Act, 1961 as a separate taxable entity but 'HUF' has not been defined in the Income Tax Act, whereby, it means that the expression 'HUF' in the Act is used in the sense in which a 'Hindu Joint Family' or a 'Hindu Undivided Family' ( 'HUF') is understood in the personal laws of Hindus. A Hindu joint or undivided family is not created for any business purposes, rather, it is a normal condition of Hindu society and prevalent throughout India based on the social necessity. Subject to the subsequent amendments in Hindu Succession Act, as per the Hindu Law and Usage, a 'Hindu Joint Family' consists of male members descended lineally from a common male ancestor, together with their mothers, wives or widows and unmarried daughters bound together by the fundamental principle of 'sapindaship' or family relationship which is the essence and distinguishing feature of the institution. It is purely a creation of law and cannot be created by an act of parties except in the case of adoption or a marriage, only when a stranger can become a 'HUF' member. An undivided family is a normal condition of a Hindu society which is ordinarily joint not only in estate but also in food and worship. The cord that knits of the family together is not property but relationship. There is no presumption that a family is joint because it is possessed of joint property. If the persons in the family live together and are joint in food and worship, irrespective of the fact that there is joint property of the family, it constitutes 'HUF'. It is a fluctuating body, its size increases with birth of a member in the family and decreases on death of a member in the family. Females go and come into the 'HUF' on marriage. A 'coparcenary' is a narrower body than a joint family and consists of only persons who take by birth an interest in the joint family property and can enforce a partition whenever they like. Though, members of 'HUF' are entitled to be maintained out of the joint family funds, however, the members of the narrower body within 'HUF' called 'Coparcenary' have birth rights in the joint family property. Hindu Law does not recognize an 'HUF' as an entity separate from the members of the family. In an 'HUF', the members collectively own it. The interest and share of the members in the estate of the family is undivided and undetermined. All the members collectively own and enjoy the property without determination of their shares until the same is partitioned. There is community of interest and unity of possession between all the members and upon the death of any of them, the others take by survivorship and not by succession. An 'HUF' though treated as a separate entity for taxation purposes, it differs in several respects from a 'corporation' and from a 'partnership firm' as the later entities can be formed by an act of parties and strangers can be their members, however, 'HUF' is a creation of law and the members having natural relationship and a stranger cannot become its I.T.A No. 2244/Ahd/2017 A.Y. 2014-15 Page No 10 Shri Gyanchand M. Bardia vs. ITO member except by adoption or marriage. Apart from that, in a partnership firm, each of the members of the partnership firm has a definite and determined share in capital as well as in the profits of the firm. A member of the firm subject to 8 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka the terms of the agreement / partnership deed may deposit or withdraw his capital but that is not so in the case of a 'HUF'. Neither there is any definite share of any of the members in the estate of the 'HUF' nor any member is entitled to any share in the profits if the 'HUF' is engaged in any business. The income of the 'HUF' goes to the common kitty. The property and the income of the 'HUF' is managed by 'Karta' or Manager of the 'HUF' who generally is a senior most male member of the family. The powers of the 'Karta' of management to the properties of the 'HUF' are wide and he is not liable to give day to day accounts of the properties to the members of the 'HUF'. Since the property of the 'HUF' does not belong solely to an individual member and the shares of the members are not determined, hence, the 'HUF' is made a taxable entity in itself. As per the provisions of section 10( 2) of the I. T. Act, any sum received by an individual, as a member of 'HUF', which has been paid out of the income of the family or out of the income of the estate of the family is not exigible to taxation. The said exemption has been given on the pattern of a partnership firm to avoid double taxation of the same amount. In the case of partnership firm, when the partnership firm has been assessed to income tax separately, then, the share of profit received by an individual person is not taxable. If a member does not opt to receive his share out of the profits of the firm and opts that the same be added towards his capital in the firm, even then, when the said partner either on dissolution of the firm or otherwise receives back his capital, the said capital is not taxable as an income of the partner, rather, the same is taken as a capital receipt. However, in the case of 'HUF', or to say in the strict sense in case of 'coparcenary', the individual members receive their share on partition. However, during the subsisting coparcenary or to say broadly 'HUF', no member is entitled to receive any definite share out of the income of the 'HUF'. It is left to the prudence and wisdom of the manager who has to manage the affairs of the 'HUF', he may spend the money or property of the 'HUF' in the case of a need of a member, such as on the marriage of a unmarried female member or in case of certain treatment of any disease of the member or in case of educational needs of any children in the 'HUF'. The amount spent may be more than that the member may have gotten on the partition of the 'HUF'. The Karta of the 'HUF', even can gift of the 'HUF' property for pious purpose and even he can contract a debt for the legal necessity and for family purposes and can bind the other members to the extent of their interest in the family property. In the above scenario, the property of the 'HUF' neither cannot be said to belong to a third person nor can be said to be in 'corporate entity', rather, the same is the property of the members of the family. It is because that the share of each of the individual member in the property or income of the 'HUF' is not determinate, hence, the family, as such, is treated as separate entity I.T.A No. 2244/Ahd/2017 A.Y. 2014-15 Page No 11 Shri Gyanchand M. Bardia vs. ITO for taxation purposes. 'HUF' otherwise is not recognized as a separate juristic person distinct from the members who constitute it. A member of the 'HUF' has a pre-existing right in the family properties. A Coparcener has a pre- existing right and interest in the property and can demand partition also, however, the other members of the 'HUF' have right to be maintain out of the 'HUF' property. On division, the share in the estate / capital of the 'HUF' cannot be treated as income of the recipient, rather, the same will be a capital receipt in his hands. However, in the case of a partnership firm, if a member receives an amount which is more than his share in the capital or in the profits of the firm, the amount received in excess of the share can be treated as a gift by the firm or by other partners to that individual which will be exigible to income tax. However, in the case of an 'HUF', since there is not any determined share of any member in the family property, any amount received by a member of a 'HUF' from property of 'HUF' cannot be said to be more than his share in the property, rather, the same is given to him in the normal course of management of family affairs as is deemed fit or prudent by manager / 'karta' of the 'HUF' and it cannot be said that such an amount received by a member of 'HUF' is the income of the said member. It is received out of the common kitty in which such a member has also a joint interest along with other family members. All the ancestral property belong to the family managed by the head of the family and once income of the family is assessed or subjected to tax as per the provisions of the Income Tax Act, then, the distribution / payment 9 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka out of the joint family property to any member of the family cannot be said to be income of such a member. The justification of the payment or the quantum of amount paid to any member by the 'Karta' / manager of the 'HUF' is though subject to challenge by other members of the HUF, if found to be not genuine or not for family good, however, a third person cannot question it. Family income flows into a common pool from which resources are drawn to meet needs of all the members which are regulated by the head of the family. In such circumstances, any amount received by a member of the 'HUF', even out of the capital or estate of the 'HUF' cannot be said to be income of the member exigible to taxation. Since such a member himself has a pre- existing right in the property of the 'HUF', hence, it cannot be said to be a gift without consideration by the 'HUF' or by the other members of the 'HUF' to that recipient member. In such circumstances, the provisions of section 56(2)(vii) are not attracted in case an individual member receives any sum either during the subsistence of the 'HUF' for his needs or on partition of the 'HUF' in lieu of his share in the joint family property. However, the converse is not true i. e. to say in case an individual member throws his self- acquired property into common pool of 'HUF'. The 'HUF' or other members of the 'HUF' do not have any pre-existing right in the self- acquired property of a member. If such an individual member throws his own/self-earned or self-acquired property in common pool, it will be an income of the 'HUF', however, the same will be exempt from taxation as the I.T.A No. 2244/Ahd/2017 A.Y. 2014-15 Page No 12 Shri Gyanchand M. Bardia vs. ITO individual members of an 'HUF' have been included in the meaning of 'relative' as provided in the explanation to section 56(2 )(vii) of the Act. It is because of this salient feature of the HUF that in case of individual, the HUF has not been included in the definition of relative in explanation to section 56(2) (vii) as it was not so required whereas in case of HUF, members of the HUF find mention in the definition of 'relative' for the purpose of the said section. In view of the above discussion, the amount received by the assessee from the 'HUF', being its member, is a capital receipt in his hands and is not exigible to income tax.\" We have also gone through the order passed by the Co-ordinate Bench of Rajkot in the case of Vineet Kumar Raghavji Bhai Bhalodia vs. ITO reported in [2011] 140 TTJ 58 (Rajkot) wherein it has been held as under: “The expression Hindu Undivided Family must be construed in the sense in which it is understood under the Hindu law as has been in the case of Surjit Lal Chhabda vs. CIT 101 ITR 776 (SC). Actually a Hindu Undivided family constitutes all persons lineally descended from a common ancestor and includes their mothers, wives or widows and unmarried daughters. All these persons fall in the definition of relative as provided in Explanation to clause (vi) of Section 56(2) of the Act. The observation of the Ld. CIT(A) that HUF is as good as a body of individuals and cannot be termed as relative is not acceptable.” 10. Going over the facts of the case as well as cited decision of the assessee we find force in the argument of the Ld. Counsel of the assessee that the assessee is entitled to claim deduction u/s 56(2) of the Act even the gift received from the father. Accordingly, the order passed by the AO confirmed by the Ld. CIT(A) is set aside and addition made under the same section is hereby directed to be deleted. 10 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka Accordingly, the appeal of the assessee is hereby partly allowed as one of the issue has not been challenged by the Assessee as discussed above.. 11. Now we shall adjudicate in IT(S.S)A No. 28/Kol/2024 for AY 2014-15. Brief facts of the case of the assessee is that search was taken at various premises of the Adhunik group of the case, income tax return for AY 2015-16 filed in compliance with the notice by the assessee. The AO after hearing the assessee has decided three issues against the assessee which are as under: “1. AO observed that the appellant had shown drawings of Rs. 31,947/- during the year under consideration whereas he had reported drawings of Rs. 1.6 Lakh in AY 2010-11. The AO estimated drawings @ Rs. 5,000/- per month and added Rs. 28,000/-. 2. The appellant had shown commodity derivative profit of Rs. 3,04,711/-. The AO carried out investigation and found that the appellant did not carry out the transactions in commodity derivatives in the ICEX platform and therefore, it was not a genuine profit to be assessed as business income. The AO forwarded the investigation result to the appellant and sought his explanation but the appellant did not comply. The AO added the amount of Rs. 3,04,711/- u/s 68 of the Act as unexplained cash credit. 3.The AO finally observed that the appellant received a sum of Rs. 17,74,878/- from a trust namely Aakash Sureka Educational Trust created by his mother. He considered the same as income of the appellant u/s 56(2) of the Act by observing that the trust is not a relative within the meaning of section 56(2) and it was not registered u/s 12A or 12AA of the Act.” 12. Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied the assessee preferred an appeal before us on the following grounds: 1. That the order passed u/s 250 is bad in law as well as on facts of the case. 2. That the Hon’ble CIT(A) erred in law as well as in facts by confirming the action of the Ld. Assessing officer by treating the amount of commodity profit of Rs. 3,04,711/- as unexplained cash credit u/s 68 of the Act. 3. That the Hon’ble CIT(A) erred in law as well as in facts by confirming the action of the Ld. Assessing officer in making an addition of Rs. 17,74,878/- received from M/s Aakash Sureka Educational Trust u/s 56(2) of the Act. 4. That the appellant craves to leave, add or amend any of the grounds during the course of appellate proceedings. 11 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka 13. The Ld. A.R submitted that the Ld. CIT(A) erred in law as well as in the facts by confirming the action of the AO by treating the amount of commodity profit of Rs. 3,04,711/- as unexplained cash credit u/s 68 of the Act. His further submission is that the Ld. CIT(A) erred in law by making addition of Rs. 17,74,878/- received from M/s Aakash Sureka Educational Trust u/s 56(2) of the Act. 14. The ld. D.R supports the impugned order. 15. As it appears from the grounds of appeal raised by the assessee only two grounds have been taken in the appeal. He did not raise any objection against the amount of Rs. 28,000/- added by the AO being estimating the amount of drawings related to day to day expenses. Hence this ground is hereby taken not pressed. 16. So far the second grounds addition of commodity profit is concerned we have already discussed in adjudicating this issue in IT(S.S)A No. 27/Kol/2024 for AY 2014- 15, so need not required to adjudicate afresh. The amount of commodity profit as added by the AO confirmed by the Ld. CIT(A) is directed to be deleted in view of the above discussion. 17. The second issue of taking an amount from Aakash Sureka Educational Trust u/s 56(2) is concerned, we find that following facts from the submission of the assessee which is as under: “a) It is a discretionary trust created for the benefit of appellant beneficiary by appellant’s mother, being a relative within the meaning of Section 56. b) Without admitting utilization of fund for non-educational purpose, it is contended that even in that circumstance, amount so received by the appellant cannot be assessed u/s 56(2). c) Amount transferred to the appellant beneficiary was already taxed in the hands of trustees and so, there cannot be double taxation (CIT vs. Managing Trustee, Nagore Daraha 57 ITR 321) d) As per Section 161 of the Act, Trust can be assessed in its own name and section 166 provides for assessment of income in the hands of beneficiary (Saran Nayak vs. DCIT [2022] 45 taxmann.com 117 (Karnataka) 12 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka e) Amount received in pursuance of dissolution of the trust cannot be termed to be an amount received by the beneficiary without consideration to be assessed u/s 56(2) [Ashok C Pratap vs. Addl. CIT, ITA No. 4615/Mum/2011 (ITAT, Mumbai)]” 18. Going over the facts of the case, we find that the deed of trust was made on 11.12.2010 by assessee’s mother Sudha Sureka creating a trust namely Aakash Sureka Educational Trust. There were two trustees i.e. Anand Sureka and Jyoti Sureka. We have gone through the decision cited by the assessee passed by the Co-ordinate Bench of Mumbai in the case of ACIT vs. Mrs. Sandhya A Pratap in 2017 (2) TMI 1013 (ITAT- Mum) and the Hon’ble Bench has held thus: “Addition on account of the receipts on dissolution of trusts under section 56(2)(vi) as income from other sources-Held that:- The facts and circumstances are exactly identical in assessee’s husband case. Respectfully following and taking consistent view as taken by co-ordinate Bench in assessee’s husband Shri Ashok C Pratap case [2012] (7) TMI 701 -ITAT Mumbai wherein held the assessee has received this amount on dissolution of trust in the capacity of beneficiaries as already been accepted by the Commissioner (Appeals), therefore, the amount received by the trust is in pursuance of dissolution of trust. The amount received in pursuance of dissolution of trust cannot be termed to be an amount received by the beneficiaries without consideration. The fact that the trust had borne the tax at maximum marginal rate on its income has also not been controverted. Therefore, the addition cannot be upheld on the applicability of clause (vi) of Sub-section (2) of Section 56 as the money received by the assessee is not without consideration, we confirm the order of Ld. CIT(A) deleting the addition- decided against revenue.” 19. The present facts of the case are concerned trust had duly filed its return of income and he paid taxes. The amount transferred to the beneficiary had already subjected to the taxation. The trust was formed as per the provision of Indian Trust Act. Once trust has paid taxes was earned in earlier years it means beneficiary has paid the said taxes and therefore, the addition made in the present case is liable to be deleted. Keeping in view, the above discussion the addition made by the AO confirmed by the Ld. CIT(A) is hereby deleted. 20. Now we shall take in IT(S.S)A No. 29/Kol/2024 for AY 2015-16 The issue raised in this appeal is similar to one as decided by us in IT(SS)A No. 27/Kol/2024 for AY 2014-15. Therefore, our decision in IT(SS)A No. 27/Kol/2024 for AY 2014-15 would, mutatis mutandis, apply to this appeal as well. Accordingly, the appeal of the assessee is allowed. 13 I.T.(S.S)..A. Nos. 27-29/Kol/2024 Assessment Years: 2014-15 to 2015-16 Aakash Sureka & Shivam Sureka In the result, all the appeals filed by the different assessee are partly allowed. Order is pronounced in the open court on 16th April, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 16th April, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Aakash Sureka & Shivam Sureka both are residing at 5A, Rajhans Apartment, 6, Hasting Park Road, Kolkata-700027 2. Respondent – DCIT, Central Circle-3(3), Kolkata 3. Ld. CIT(A)- Kolkata-21, Kolkata 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "