M/s. Satyam Casting (P) Limited, Gopalpur V. DCIT, Circl-2(1), Cuttack

CO 19/CTK/2021

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A), Cuttack, which had deleted the addition made by the Assessing Officer regarding the income from derivatives and futures & options transactions reported by M/s. Satyam Casting Pvt Ltd. The revenue contended that the transactions were not genuine and involved collusion with brokers to show profits as against actual losses. The Tribunal examined the evidence, including the responses from the brokers and the trade logs from the exchanges, and found that the assessee had indeed offered the income from these transactions to tax. The Tribunal also noted that the brokers involved had been barred from trading by SEBI, but this did not affect the genuineness of the transactions as the income had been reported and taxed.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 300263 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 01-07-2021
• Other Referred Cases: Sham Sunder Khanna vs CIT, CCE vs. Andaman Timbers Industries, Digvijay Chemicals Ltd. vs. ACIT, Hindustan Tobacco Company, Dr Gauri Shankar Prasad, Swati Bajaj & others vs. ITAT, ITO vs. M. Pirai Choodi, CIT vs. P C Chemicals, Vetrivel Minerals vs. ACIT
• Laws Referred To: Income Tax Act, Securities and Exchange Board of India Act, 1992, Companies Act, 2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Opportunity of cross examination; Transactions in derivatives; Accommodation entries
• Section: 68; 153A; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER DCIT, Circle Aayakar Bhavan, Shelter Square, Cuttack PAN/GIR No (Appellant) M/s. Satyam Casting Pvt Ltd., At./PO: Plot No.A Choudwar, Industrial Estate, Gopalpur, Cuttack PAN/GIR No (Cross objector) Per Bench This is an appeal filed by the dated 17.9.2020 of the ld CIT(A), Cuttack No.0213/2018 assessee has also filed cross objection in the appeal filed by the revenue. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.28/CTK/2021 Assessment year: 2016-17 DCIT, Circle-1(1), Aayakar Bhavan, Shelter Square, Cuttack vs M/s. Satyam Casting Pvt Ltd., At./PO: Plot No.A Choudwar, Industrial Estate, Gopalpur, Cuttack PAN/GIR No.AAFCS 1536 H ) .. ( Respondent C.O.No.19/CTK/2021 (In ITA No.28/CTK/2021): A.Y. 2016 M/s. Satyam Casting Pvt Ltd., At./PO: Plot No.A-2, Choudwar, Industrial Estate, Gopalpur, Cuttack vs DCIT, Circle Aayakar Bhavan, Shelter Square, Cuttack PAN/GIR No.AAFCS 1536 H Cross objector) .. ( Appellant) Assessee by : Shri P.R.Mohanty, AR Revenue by : Shri M.K.Gautam, CIT Date of Hearing : 28/12 Date of Pronouncement : 28/12 O R D E R This is an appeal filed by the revenue dated 17.9.2020 of the ld CIT(A), Cuttack 0213/2018-19 for the assessment year assessee has also filed cross objection in the appeal filed by the Page1 | 18 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER M/s. Satyam Casting Pvt Ltd., At./PO: Plot No.A-2, Choudwar, Industrial Estate, Gopalpur, Cuttack Respondent) No.28/CTK/2021): A.Y. 2016-17 DCIT, Circle-1(1), Aayakar Bhavan, Shelter Square, Cuttack Appellant) P.R.Mohanty, AR : Shri M.K.Gautam, CIT DR 12/2022 12/2022 revenue against the order dated 17.9.2020 of the ld CIT(A), Cuttack in Appeal for the assessment year 2016-17. The assessee has also filed cross objection in the appeal filed by the ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page2 | 18 2. Shri M.K.Gautam, ld CIT DR appeared for the revenue and Shri P.R.Mohanty, ld AR appeared for the assessee. 3. At the time of hearing, ld AR submitted that he does not wish to press cross objection and has also endorsed to this effect in the file. Consequently, cross objection filed by the assessee stands dismissed as withdrawn. 4. The appeal filed by the revenue is barred by limitation by 111 days. The revenue has stated that as per the Hon’ble Supreme Court order against suo-moto writ petition (Civil) No.3/2020, the limitation period of filing of appeal has been extended from 15 th March, 2020 until further order on account of Covid-19 pandemic and subsequent difficulties. Hence, the appeal filed belatedly be condoned. Ld A.R. did not object to the condonation petition filed by the revenue. Hence, we condone the delay of 111 days and admit the appeal for adjudication. 5. In revenue’s appeal, ld CIT DR submitted that the assessee is a company which is engaged in the business of manufacturing of steel. It was the submission that the total sales of the assessee during the year was Rs.31.17 crores and the income from Derivatives and Future & Option was shown in the profit and loss account at Rs.6.77 crores. It was the submission that the net profit was shown at Rs.29,98,287/- in ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page3 | 18 the computation. In the computation of total income after the set off of brought forward business loss, Nil income had been offered to tax. It was the submission that in the course of assessment, it was noticed that the assessee had done trading in Derivatives and Future & Option through three entities namely (i) M/s. Geometry Vanijya (P) Ltd., (ii) M/s. Bahubali Forex (P) Ltd., and (iii) M/s. Wellindia Securities (P) Ltd. The Assessing Officer had called for the confirmation letters from three entities and the replies from M/s. Geometry Vanijya (P) Ltd., and M/s. Bahubali Forex (P) Ltd., which were based at Calcutta and Noida, respectively were received through the same courier having consecutive serial number. This raised doubt of the Assessing Officer. Consequently, notices u/s.133(6) of the Act were issued to both the said concerns but the notices were received back with the postal remark “Moved”. The Assessing Officer subsequently issued a show cause notice to the assessee intimating the said defect and non- service of notice and the assessee submitted that the transactions having already been completed and the income having already been offered to tax, the assessee would not be in a position to give details of the said brokers and that if time was given, the assessee would attempt to get the latest address and provide the details. In respect of third broker, i.e. M/s. ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page4 | 18 Wellindia Securities (P) Ltd., the said entity had responded to the notice u/s.133(6) of the Act and had furnished soft copy of the Future & Option bills. As per the said bills submitted by the broker, the assessee had suffered a loss of Rs.1,23,23,705/- but the assessee had in its books shown a profit of Rs.1,50,17,510/- . It was the further submission that in respect of the transactions done through M/s. Geometry Vanijya (P) Ltd, notices were sent to Metropolitan Exchange of India Limited through which the said brokers had transacted. Metropolitan Exchange of India Limited had responded vide letter dated 29.11.2018 by providing the trade log, which showed that the assessee had made purchases of Rs.23,61,53,977/- and sales of Rs.23,61,45,650/- and thus incurred a loss of Rs.8,327/-. This was not inclusive of the brokerage, stamp duty and other charges. It was the submission that, however, the assessee had shown a profit of Rs.4,12,97,415/-. It was the submission that consequently, the loss as has been incurred by the assessee, had been shown as profit by the assessee of Rs.4,12,97,415 + Rs.1,15,17,510/- totaling to Rs.6,27,14,925/-. It was the submission that the Assessing Officer had also relied upon the statement recorded from one of the entry operator of M/s. Geometry Vanijya (P) Ltd., namely Shri Pankaj Agarwal recorded by the Investigation Wing on 1.9.2011 to submit that ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page5 | 18 M/s. Geometry Vanijya (P) Ltd., was an entity, which was used for providing book entries. It was the submission that though the trade log showed a loss, the assessee had shown a profit and the assessee had claimed that the contract notes provided by the assessee as giving the correct figure. Ld CIT DR further submitted that he had obtained the order of SEBI in WTA/RKA/ISD/94/2016 under sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 passed on 12.8.2016, wherein, both M/s. Geometry Vanijya Pvt Ltd., having BSE ID 4036 and Bahubali Forex Pvt Ltd., having BSE ID of 4034 had been barred from doing any business of trading in securities and derivatives. It was the submission that in para 11 of the order, SEBI had mentioned that the allegation against the trading members that “they had prima facie facilitated their clients to use and employ the alleged premeditated manipulative device or contrivance while dealing in securities and indulged in non-genuine and deceptive transactions”. It was the submission that the said brokers had assisted the assessee to book profits as against loss actually incurred by them. It was the submission that consequently, the Assessing officer had treated the income derived by the assessee as unexplained cash credit and brought the same to tax to an extent of Rs.5,61,68,107/-. It was the submission that the ld ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page6 | 18 CIT (A) had deleted the addition on frivolous ground by holding that the Assessing Officer had not proved the transactions done by the assessee to be false. It was the further submission that the ld CIT(A) had also used the ground that opportunity of cross examination had not been granted to the assessee in respect of the statement recorded from Shri Pankaj Agarwal to delete the addition. It was the submission that M/s. Geometry Vanijya (P) Ltd., and M/s. Bahubali Forex (P) Ltd., had not responded to the notices issued by the Assessing Officer and in respect of M/s. Wellindia Securities Limited, the soft copies of Future & Option bills provided by them showed that the assessee had incurred loss against which the assessee had shown profit. It was thus the submission that the addition as made by the Assessing Officer is liable to be confirmed and the order of the ld CIT(A) is liable to be reversed. Ld CIT DR has submitted that on identical facts, the Hon’ble Punjab & Haryana High Court in the case of Sham Sunder Khanna vs CIT (2017) 81 taxmann.com 100 (P&H) has held the issue in favour of the assessee. Ld CIT DR has filed written submissions, as follows: “This is a departmental appeal against the order dated 17.09.2020 of Id. CIT(A), Cuttack. The assessee company is engaged in the business of manufacturing steel. Strangely the profit & loss account for the year ended on 31.03.2016 showed other income of Rs.6,77,01,960/- which was in the nature of income from derivatives, ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page7 | 18 F&O segment at NSE and BSE and currency derivatives on the MCX through the brokers namely Geometry Vanijya (P.) Ltd., M/s. Wellindia Securities Ltd. and M/s. Bahubali Forex (P.) Ltd. Kindly refer to pages-1 to 5 of the paper book filed by the undersigned. 1. The A.O. issued notices u/s.133(6) of the Act to M/s. Bahubali Forex (P.) Ltd., C/o Dilip Saraf, 156, Cotton Street, 3rd Floor, Kolkata, Geometry Vanijya (P.) Ltd. at 11, Clive Row, 5th Floor, Kolkata and M/s. Wellindia Securities Ltd. at A-78, Sector-2, lst Floor, Near Metro Station, Sector-l5, Noida, Uttar Pradesh on 13th December/l4th December, 2017. Kindly refer to pages-6 to B of paper book filed by the undersigned in this regard. In response, the alleged brokers filed the copies of ledger accounts of Satyam Castings Pvt. Ltd. in their books of account. 2. Though Geometry Vanijya (P.) Ltd. and M/s. Bahubali Forex Pvt. Ltd. Were having their offices at Kolkata at different addresses yet their replies were received same courier service (Skyking) vide two consecutive booking numbers 369051801 and 369051802. In this regard, kindly refer to pages-g & 13 of the paper book filed by the undersigned. Their addresses on the envelope were written in a similar fashion and same handwriting. Further Geometry Vanijya (P.) Ltd. and M/s. Wellindia Securities Ltd. were having their offices at Kolkata and Noida respectively. But it was also baffling to note that both the companies committed same mistakes (Reply was mentioned as replay). Even the language in both the replies was strikingly similar. In this regard, kindly refer to pages-16 & 20 of the paper book filed by the undersigned. The A.O. inferred that though both the companies were having their offices at Kolkata & Noida but the person who sent the reply was same. This itself showed that the brokers involved were in collusion with the assessee company. 3. The A.O. now chose to search the addresses as per Company Master Data downloaded from the website of MCA and on these addresses (pages-21, 23 & 24 of the paper book filed by the undersigned), notices u/s.133(6) were again sent by the A.O. Kindly refer to para-3 .4 on page-3 of the assessment order. Strangely now the notice sent to M/s. Bahubali Forex (P.) Ltd. was received back with the remarks of the postal department as "moved". In this regard, kindly refer to pages-25 of the paper book filed by the undersigned. The notice sent to Geometry Vanijya (P.) Ltd. was received back with the remarks of the postal department as "moved". In this regard, kindly refer to pages-28 of the paper book filed by the undersigned. The A.O. noticed that both the companies had changed the addresses of their registered offices without informing ROC ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page8 | 18 though as per section L2 of Companies Act, 2013, it was mandatory to inform the Registrar of Companies about change in address within 15 days. It was apparent that the alleged brokers were only entry providers. M/s. Wellindia Securities Ltd. furnished soft copies of future & options bills which showed that Satyam Castings Pvt. Ltd, had actually suffered losses of Rs.1,23,23,705/- in the alleged transactions whereas it had shown profit of Rs.1,15,17,510/- in its books of account (Para-4 on page-6 of the assessment order). 4. The A.O. now issued notice u/s.133(6) to BSE and MCX (Multi Commodity Exchange) to verify the transactions made with Geometry Vanijya (P.) Ltd. And M/s. Bahubali Forex (P.) Ltd. In response, the MCX informed that no client was registered with the name "Satyam castings Pvt. Ltd.". On the other hand, BSE did not respond to the notice issued by the A.O. Left with no alternative, the A.O. was constrained to issue notice u/s.133(6) at the address mentioned in the contract notes furnished by the assessee. However no reply was forthcoming. 5. Meanwhile the A.O. came to know that DDIT(Inv.), Unit-IV(S), Kolkata had recorded statement of Shri Pankaj Agarwal, an entry operator u/s.131 of the Income Tax Act. In reply to question no-2 of said statement, Shri Pankaj Agarwal stated that he had floated several companies including Geometry Vanijya (P.) Ltd. to provide accommodation entries to several beneficiaries. 6. The A.O. thereafter issued a show-cause notice dated 24.lO.2OtB to the assessee to explain as to why said credits of Rs.6,77,0L,960/- should not be treated as unexplained. The A.O. also provided copies of Company Master data as downloaded from the website of MCA along with copy of statement of Shri Pankaj Agarwal recorded by DDIT(Inv.), Kolkata. In response, the ld. AR of the assessee submitted that he had provided all the necessary details including name of the brokers, copies of ledger accounts in their books and contract notes. It was alleged that all the transactions were carried out through banking channels. The Id. AR of the assessee also submitted that certain spelling mistakes in the replies will not make the alleged transactions as false. It was alleged that brokers might have changed their addresses and it was requested to give 15 day's time to find out the new addresses of the brokers. It was stated that the assessee company had carried out transactions in the currency derivatives at MCX whereas the reply was received from MCX (Metal & Energy Segment). As regards the statement of Shri Pankaj Agarwal, it was submitted that it was recorded on 01.09.2011 ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page9 | 18 whereas the transactions with Geometry Vanijya (P.) fta. were carried out in FY 2015-16. 7. In view of request made by the assessee company, the A.O. thereafter issued notice u/s.133(6) to the Metropolitan Exchange of India Ltd. to find out the profits in the currency derivatives. The Metropolitan Exchange of India Ltd. vide its letter dated 29.11.2018 submitted the trade log which showed that the assessee company had purchased currency derivatives worth Rs.23,61,53,977/- and total sales of currency derivatives stood at Rs.23,61,45,650/-. Thus the assessee company had actually incurred loss of Rs.8327/-. It was subject to be further enhanced if costs like brokerage to be considered. On the other hand, Satyam Castings Pvt. Ltd. had profit of Rs.4,12,97,415/- in its books of account (para-3.13 on page-I0 of the assessment order). The trade log along with emails were sent to the assessee company for rebuttal. The assessee company thereafter gave a vague reply that trade log was not for the entire year. The Metropolitan Exchange of India Ltd. was requested to clarify the matter. However it was again stated. that Satyam Castings Pvt. Ltd. had traded only for the period from December,2015 to February, 2016. 9. The transactions made through M/s. Bahubali Forex (P.) fta. Remained unverified as it could not be located at its registered address. 10. The order of ld. CIT(A), Cuttack suffers from erroneous findings due to following reasons: i.) The order of ld. CIT(A) is cryptic and he has blindly followed the version of the assessee without any applying his own mind. In his eagerness to allow the relief to the assessee, he even ignored the detailed inquiries made by the A.O. ii.) The mere paper work/documentation such as contract notes and monies flowing through the banking channels will not make a non- genuine transaction as a genuine transaction. iii.) The entries in the contract notes were proved to be false in view of categorical reply given by M/s. Wellindia Securities Ltd. and the Metropolitan Exchange of India Ltd. Thus by no means, these contract notes are sacrosanct when the brokers issuing these bills are not found at the given addresses. M/s. Wellindia ties Ltd. furnished soft copies of future & options bills which showed that Satyam Castings Pvt. Ltd. had actually suffered losses of ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page10 | 18 Rs.1,23.23,705/- in the alleged transactions whereas it had shown profit of Rs.1,15,17,510/- in its books of account. Similarly the Metropolitan Exchange of India Ltd. vide its letter dated 29.11.2018 submitted the trade log which showed that the assessee company had purchased currency derivatives worth Rs.23,61,53,977/- and total sales of currency derivatives stood at Rs.23,61,45,65O/-. Thus the assessee company had actually incurred loss of Rs.8327/-. It was subject to be further enhanced if costs like brokerage, transaction charges and stamp duty incurred bv Geometrv Vanijva (P.) Ltd. Were to be considered. On the other hand, Satyam Castings Pvt. Ltd. had profit of Rs.4,12,97,415/- in its books of account. Thus it is clear that the ld. CIT(A) was guided by the irrelevant considerations namely that the A.O. failed to give any reason that these contract notes were not genuine. iv.) The ld. CIT(A) has held that the A.O. had relied on the statement of Shri Pankaj Agarwal without providing an opportunity of cross examination to the assessee company. At the outset, the ld. AR of the assessee company never sought an opportunity to cross-examine Shri Pankaj Agarwal. Even assuming and without conceding that such a request was made before the CIT (Appeals), he should have directed the A.O. to allow such an opportunity of cross examination. Hence it was a failure on the part of the assessee company that it did not seek an opportunity to cross-examine Shri Pankaj Agarwal. Moreover the assessment can't be cancelled merely on this ground. Even in the Decision of Hon'ble Supreme Court in the case of CCE vs. Andaman Timbers Industries (127 DTR 241), the Hon'ble Apex Court held in para-6 as under: "6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority, though the statements of those witnesses were made the basis of the impugned order, is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was granted and the aforesaid plea was not even dealt with by the Adjudicating Authority. As far as the Tribunal was concerned , rejection of this plea was totally untenable. The Tribunal had simply stated that cross examination of the said dealers could ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page11 | 18 not have brought out any material which would not be in possession of the appellants themselves to explain as to why their exfactory prices remained static. It was not for the Tribunal to have guesswork for what purposes the appellant wanted to cross examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods, were in fact sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of the cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated L7-3-2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions." v.) Adverse evidence and material, relied upon in the order, to reach the finality, should be disclosed to the assessee. But this rule is not applicable where the material or evidence used is of Collusive Nature. The Hon'ble Allahabad High Court held in the case of Digvijay Chemicals Ltd. vs. ACIT (248 ITR 381) that it is not necessary that there must be always a cross examination of a witness before discarding its evidence. vi) Reliance is also placed on the decision of Hon’ble Kolkata High Court in the case of Hindustan Tobacco Company, 27 taxmann.com 155 and Hon’ble Patna High Court in the case of Dr Gauri Shankar Prasad, 88 taxmann.com 700. vii.) The Hon'ble Kolkata High Court in the case of Swati Bajaj & others in IA No.GA/2/2022 & In ITAT /6/2022 dated 14.06.2022 has held as under: "59. We are conscious of the fact that there may be exceptions however nothing has been brought before us to show that there was an exception in any of these appeals heard by us. In a few cases the assessee has been made known of the statement of the Director of the penny stock company or the stock broker, entry operator despite ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page12 | 18 which those assessees could not make any headway. While on this issue, we need to consider as to whether and under what circumstances the right of cross examination can be demanded as a vested right. In Kishanlal Agarwalla, the Hon'ble Division Bench of this Court pointed out that no natural justice requires that there should be a kind of formal cross examination as it is a procedural justice, governed by the rules and regulations. Further it was held that so long as the party charged has a fair and reasonable opportunity would receive, comment and criticize the evidence, statements or records on which the charges is being against him, the demand and tests of natural justice are satisfied. 60. In Bakshi Ghulam Mohammad AIR (1967) SC 122, the Hon'ble Supreme Court held that the right of hearing cannot include the right of cross examination and the right must depend upon the circumstances of each case and must also depend on the statute under which the allegations are being enquired into." viii.) Without prejudice to the above. reliance is placed on the decision of the Hon'ble Supreme Court in the case of ITO vs. M. Pirai Choodi (63 DTR 187) wherein in the absence of an opportunity to cross-examine the witness, the matter was restored to the A.O. The Hon'ble Delhi High Court in the case of CIT vs. P C Chemicals (27 taxmamnn.com 9) held that where assessment was reopened and additions under section 69,4 were made without providing statements and materials, on basis of which such additions were made, to assessee, matter should be remitted back without quashing said order. The Hon'ble Madras High Court in the case of Vetrivel Minerals vs. ACIT (129 tomann.com 126) held where assessment orders passed in case of assessee under section 153A were passed in gross violation of principles of natural justice as copies of all materials seized which were used for framing assessment had not been supplied to assessee, no opportunity for cross examination had been provided and even section B58 of Evidence Act had not been complied with before admitting electronic evidence, matter was to remanded back to Assessing Officer for adjudication afresh. ix.) The CIT(A) has neither any authority nor the jurisdiction to challenge the action of the A.O. to issue notices u/s.133(6) on the basis of information available in the Company Master Data on the ground that the alleged brokers had earlier given copies to ledger accounts to him. He has ignored the discrepancies noticed by the ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page13 | 18 A.O. in the earlier replies. . It is unfortunate that ld. CIT(A) being a responsible authority should not have turned blind eye to the findings of the AO. On the contractor, he was pleased to blindly accept the version of the assessee company. x.) The ld. CIT(A) has erroneously held that under section 68 of the Income Tax Act, the A.O. should have garnered evidence that the alleged transactions were not genuine. However it is a settled Iaw that this onus keeps on shifting and it is not static. Once the A.O. had pointed out the mistakes in the replies of the alleged brokers and the ld. AR of the assessee was not able to reconcile the figures of losses (as pointed out by the brokers) as against profits shown by the assessee company in its books of account, nothing more was required from the A.O. Thus the order of ld. CIT(A) suffers from several infirmities and should be set-aside and the order of the A.O. be restored.” 6. In reply, ld AR submitted that the assessee has offered the profit from the Derivatives and Future & Options transaction to tax. He has filed the profit and loss account and computation of income to submit that the income having been offered to tax, the same cannot be treated as unexplained cash credit u/s.68 of the Act. It was the submission that the order of the ld CIT(A) is liable to be upheld. 7. We have considered the rival submissions. A perusal of the facts of the present case clearly show that at the outset, the statement recorded from Pankaj Agarwal is on 1.9.2011 and the transaction related to the assessment year 2016-17. Obviously, the statement of Pankaj Agarwal could have no bearing to the transaction relating to a much later assessment year and, therefore, the said statement is of no assistance to the Revenue. We are not going into the question as to whether the cross examination of the said Pankaj Agarwal is to be given to the assessee ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page14 | 18 insofar as the assessee is not implicated by Pankaj Agarwal in the said statement. The next evidence used by the Assessing Officer is that both M/s. Geometry Vanijya (P) Ltd., and M/s. Bahubali Forex (P) Ltd., had not responded to the notices issued u/s.133(6) of the Act. A perusal of the assessment order shows that the said notices had been issue on 31.8.2018. However, SEBI vide its order dated 12.8.2016 has already closed their business. Once SEBI has closed the business of M/s. Geometry Vanijya (P) Ltd., and M/s. Bahubali Forex (P) Ltd.,, it is obvious that they would not respond to any notice sent to them insofar as they would not be existing at the mentioned address. Thus, the primary evidence on the basis of which, the Assessing Officer has tried to dislodge the evidence produced by the assessee itself has failed. The assessee, admittedly, has produced the contract notes. These contract notes are also supported by transaction recorded in the BSE, NSE and MCX. Therefore, these evidences have not been shown to be false. On this ground itself, the addition as made by the AO is liable to deleted and the order of the ld CIT(A) upheld and we do so. 8. Further, on perusal of the profit and loss account shows that the income from derivatives to an extent of Rs.6,77,01,960/- has been offered in the profit and loss account of the assessee. It is noticed from the schedule from the Note- ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page15 | 18 15 to the profit and loss account, which is extracted as follows: ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page16 | 18 When this has been clubbed with the sale of Ingot, it shows the total of Rs.34,17,31,586/- as revenue from operation. This revenue from operation is shown in the profit and loss account, which is extracted as follows: ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page17 | 18 In the profit and loss account, the net profit has been arrived at Rs.29,98,288/-. It is shown in the profit and loss account, which is extracted as follows: Thus, the income from the dealing in derivatives has been offered to tax by the assessee in its profit and loss account. It is settled law that once the income has been offered to tax, the same cannot be treated as unexplained cash credit u/s.68 of the Act. Thus, even on this ground, the addition as made by the ITA No.28/CTK/2021 C.O.No.19/CTK./2021 Assessment year: 2016-17 Page18 | 18 AO is liable to be deleted and we do so. Thus, in these circumstances, the order of the ld CIT(A) stands upheld for this alternative reason also. 10. In the result, appeal of the revenue and cross objection of the assessee is dismissed. Order dictated and pronounced in the open court on 27/12/2022. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 27/12/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Assessee : M/s. Satyam Casting Pvt Ltd., At./PO: Plot No.A-2, Choudwar, Industrial Estate, Gopalpur, Cuttack 2. The revenue: DCIT, Circle-1(1), Aayakar Bhavan, Shelter Square, Cuttack 3. The CIT(A)- Cuttack 4. Pr.CIT- Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//