Appeal Details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 0947 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
4 year(s) 3 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-09-2016
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
28-07-2016
Assessment Year
2009-2010
Appeal Filed On
07-06-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO. 1 176 /PN/20 12 / ASSESSMENT YEAR : 20 0 9 - 1 0 THE INCOME TAX OFFICER , CENTRAL 2, NASHIK . / APPELLANT VS. M/S. SANJAY UDYOG, E - 62, MIDC, JALGAON, . / RESPONDENT PAN: AA MFS6521N / APPELLANT BY : SHRI ANIL CHAWARE / RESPONDENT BY : S HRI NIKHIL PATHAK / DATE OF HEARING : 28 . 0 7 .201 6 / DATE OF PRONOUNCEMENT: 23 . 0 9 .201 6 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEA L FILED BY THE REVENUE IS AGAINST ORDER OF C I T (A) - I , NASHIK , DATED 22 . 0 3 .20 12 RELATING TO ASSESSMENT YEAR 200 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING CONCISE GROUND S OF APPEAL: - 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.54,552/ - ON ACCOUNT OF UNRECORDED SALES OF JEERA & BASAN. ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 2 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS NOT APPRECIATED THE FACT THAT THERE IS IN NO EVIDENCE THAT THE WEIGHT OF STOCK INCLUDES WEIGHT OF PACKING MATERIAL AND ALSO THE ASSESSEE HAS NOT TAKEN THE GROUND THAT STOCK WEIGHT OF IS INCLUSIVE OF PACKING MATERIAL IS ASSESSM ENT PROCEEDING, WHICH IS NOTHING BUT AN AFTERTHOUGHT. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.50,65,465/ - ON ACCOUNT OF SPECULATIVE INCOME EARNED FROM TRANSACTIONS THROUGH P.A. TRADING COMPANY, MUMBAI. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ADMITTING THE FRESH EVIDENCE BY THE ASSESSEE WHICH WAS NOT PRODUCED DURIN G ASSESSMENT PROCEEDINGS DESPITE AMPLE OPPORTUNITY GIVEN TO THE ASSESSEE TO FURNI SH SAME I N ASSESSMENT PROCEEDINGS. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THE EVIDENCE SUBMITTED BY THE ASSESSEE CLAIMING COMMODITY TRANSACTIONS HAS N OT BEEN CONFIRMED BY THE NCDEX AND AS SUCH THE INCOME FROM THESE TRANSACTIONS SHOWN AT RS.50,65,465/ - IS NOT THROUGH GENUINE COMMODITY TRANSACTIONS, THUS RENDERING THE DECISION PERVERSE AND CONTRARY TO THE EVIDENCE ON RECORD. 6. ON THE FACTS AND THE CIRC UMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT TREATING THE INCOME OF RS.45,22,120/ - AS 'INCOME FROM OTHER SOURCES' AS AGAINST 'SPECULATIVE INCOME' CLAIMED BY THE ASSESSEE. 7. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT PROVISIONS OF SECTION 43(5) OF THE ACT PRE - SUPPOSE A CONTRACT BETWEEN THE ASSE S SEE AND THE BROKER AND AS PER EVIDENCE ON RECORD, THE ASSESSEE IS NOT REGISTERED AS A CLIENT WITH THE BROKER M/S. A 1 COMMODITIE S FINANCIAL SECURITIES, MUMBAI AND THEREFORE THERE IS NO VALID COMMODITIE S FINANCIAL SECURITIES, MUMBAI AND THEREFORE THERE IS NO VALID CONTRACT BETWEEN THE ASSESSEE AND THE SO CALLED BROKER. 8. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THE CONTRACT NOT ES FURNISHED BY THE ASSESSEE WERE FOUND TO BE NON GENUINE AND THAT NONE OF THE TRANSACTIONS HAVE APPEARED IN MCX TRADES, THUS RENDERING HIS DECISION PERVERSE AND CONTRARY TO THE EVIDENCE ON RECORD. 9. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN APPLYING THE RATIO OF DECISION REPORTED IN MUKESH R. MAROLIYA VS. ADDL. CIT (2006) 6 S0T 247 (MUM) WHICH IS RELATED TO 'OFF MARKET' TRANSACTIONS OF SHARES AND THEREFORE IS NOT APPLICABLE TO THE FACTS OF THE CASE SINCE THE TRANSACTIONS OF THE ASSESSEE ARE 'OFF MARKET' TRANSACTIONS IN COMMODITIES WHICH ARE AB INITIO VOID AS PER PROVISIONS OF FORWARD CONTRACTS REGULATION ACT (FCRA). 10. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERR ED IN APPLYING THE RATIO OF DECISION IN SMT. SUNITA OBERIO VS ITO (2009) 30 DTR 474 SINCE IN THAT CASE THE SUMMONS ISSUED TO THE BROKER WAS RETURNED UN - SERVED WHEREAS IN ASSESSEE'S CASE THE BROKER HAS NOT CONFIRMED THE TRANSACTIONS. 11. THE ORDER OF THE LEARNED CIT(A) BE VACATED AND THAT OF A.O. BE RESTORED. ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 3 3. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) ON VARIOUS ISSUES WHICH WE PROCEED TO DECIDE IN THE PARAS HEREIN BELOW. 4. THE FIRST ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF RS .54,552/ - MADE ON ACCOUNT OF UNRECORDED SALES OF J EERA AND B E S A N . 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING AND DEALING IN PULSES AND ONLINE TRADING IN COMMODITIES. FOR THE YEAR UN DER CONSIDERATION, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.12,99,880/ - . THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSING OFFICER FROM THE MONTHLY QUANTITATIVE STOCK DETAILS OF J EERA FILED BY THE ASSESSEE NOTED THAT IN THE MONTH OF OCTOBER, 2008, THERE WAS SHORTAGE OF 5.2 QUINTALS. APPLYING THE AVERAGE RATE OF J EERA AS ON 31.10.2008, THE ASSESSING OFFICER MADE ADDITION OF RS.50,844/ - . FURTHER, FROM THE QUANTITATIVE DETAILS OF B E S AN , THE ASSESSING OFFICER NOTED THAT IN THE MONTH OF JULY, 2008, THE CLOSING STOCK WAS SHORT BY 1.05 QUINTALS AND HENCE, ADDITION OF RS. 3 , 704 / - WAS MADE ON ACCOUNT OF UNRECORDED SALES. 6. BEFORE THE CIT(A), THE CLAIM OF ASSESSEE WAS THAT THE SAID ADDITION MADE BY THE ASSESSING OF FICER ON ACCOUNT OF SHORTAGE WAS FACTUALLY INCORRECT AS THERE WAS NO SHORTAGE BUT EXCESS QUANTITY HAD BEEN SOLD ON ACCOUNT OF WEIGHT OF PACKING MATERIAL . HE ALSO POINTED OUT THAT THE ALLEGED EXCESS SALE HAD BEEN CREDITED TO THE TRADING AND PROFIT & LOSS A CCOUNT AND HENCE, NO ADDITION COULD BE MADE ON THIS ACCOUNT. THE CIT(A) NOTED THAT THERE WAS EXCESS SALE OF 5.2 QUINTALS IN RESPECT OF J EERA AND IN RESPECT OF B E SIN, THERE WAS EXCESS SALE OF 1.05 QUINTALS AS PER THE QUANTITATIVE DETAILS OF SALES AND PURCH ASES OF SAID GOODS. THEREFORE, THE ADDITION MADE ON ACCOUNT OF ALLEGED SHORTAGE TREATED AS UNRECORDED SALES WAS HELD TO BE NOT JUSTIFIED. ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 4 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECO RD. IN THE FACTS OF THE ISSUE RAISED BY WAY OF GROUNDS OF APPEAL NOS.1 AND 2 BY THE REVENUE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHORTAGE OF STOCK IN RESPECT OF J EERA AND B E SIN IN THE RESPECTIVE MONTHS. THE QUANTITATIVE DETAILS O F EACH OF THE ITEMS WERE PROVIDED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, WHO NOTED THAT THE ALLEGED SHORTAGE OF STOCK AND ADDITION WAS MADE ON ACCOUNT OF UNRECORDED SALES. HOWEVER, THE PERUSAL OF DETAILS AVAILABLE ON RECORD AND AS INCORPORATED EVEN BY THE CIT(A) UNDER PARA 7 IN THE ACCOUNT OF J EERA, AS AGAINST OPENING STOCK OF NIL IN THE MONTH OF OCTOBER, 2008, THE ASSESSEE HAS SHOWN PURCHASES OF 254.80 QUINTALS AS AGAINST WHICH, THE SALES WERE TO THE EXTENT OF 260 QUINTALS. THE DIFFERENCE BETWEEN THE QUANTITATIVE DETAILS WAS THE WEIGHT OF PACKING MATERIAL AND THE SALES UNDERTAKEN BY THE ASSESSEE WERE DULY SHOWN IN THE BOOKS OF ACCOUNT. IN VIEW THEREOF, WHEN THE QUANTITY IS MATCHED, THERE IS EXCESS SALE OF QUANTITY BY THE THEREOF, WHEN THE QUANTITY IS MATCHED, THERE IS EXCESS SALE OF QUANTITY BY THE ASSESSEE AND THE SAME BEIN G ON ACCOUNT OF WEIGHT OF PACKING MATERIAL, DOES NOT WARRANT ANY ADDITION IN THE HANDS OF ASSESSEE, HENCE, THE SAME IS DELETED. THE SAME IS THE CASE WITH REGARD TO B E SIN IN THE MONTH OF JULY, 2008. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCE S, WE CONFIRM THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS .54,552/ - . THE GROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE REVENUE ARE THUS, DISMISSED. 9. NOW, COMING TO THE GROUND OF APPEAL NO.3, WHERE THE REVENUE IS AGGRIEVED BY THE ORDER OF CIT(A) IN D ELETING THE ADDITION OF RS.50,65,465/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SPECULATIVE INCOME EARNED FROM TRANSACTIONS THROUGH M/S. PA TRADING COMPANY, MUMBAI. THE NEXT CONNECTED ISSUE RAISED BY THE REVENUE IS THAT THE CIT(A) HAD ERRED IN ADMITTIN G FRESH EVIDENCE WHICH WAS NOT ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 5 PRODUCED BEFORE THE ASSESSING OFFICER. THE SAID ISSUES ARE RAISED BY WAY OF GROUNDS OF APPEAL NO.3 TO 5. 10. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED LOSSES ON ACCOUNT OF SPECULATION, WHICH WAS SET OFF AGAINST SPECULATIVE PROFITS. THE ASSESSING OFFICER ISSUED LETTERS TO NCDEX AUTHORIT Y ON 12.10.2011. IN REPLY, THE NCD EX AUTHORITY STATED THAT THE ASSESSEE WAS CLIENT OF SEVEN MEMBERS OF EXCHANGE AND DURING TH E YEAR UNDER CONSIDERATION, IT HAD TRADED ONLY WITH ONE CLIENT I.E. M/S. PA TRADING COMPANY. THE NCD EX AUTHORITY HAS SENT THE INFORMATION ON CD. FOR THE PURPOSES OF CROSS - VERIFICATION OF LOSSES, THE ASSESSING OFFICER ISSUED LETTER TO M/S. PA TRADING COMP ANY ASKING IT TO FURNISH THE STATEMENT OF COMMODITY TRADING UNDERTAK EN BY THE ASSESSEE. IN REPLY, THE INFORMATION WAS SUBMITTED BY THE SAID CONCERN. THE ASSESSING OFFICER ON ANALYZING THE INFORMATION NOTED THAT TWO TRADES AS REPORTED BY M/S. PA TRADING C OMPANY DID NOT FIND ANY MENTION IN NCD EX TRADES. THE FIRST TRADE WAS IN THE COMMODITY OF NOT FIND ANY MENTION IN NCD EX TRADES. THE FIRST TRADE WAS IN THE COMMODITY OF POTFA QDEL AND THE SECOND WAS IN RESPECT OF TRADE OF SYBEA N IDR, WHICH WERE CONDUCTED ON 20.06.2008 AND 20.08.2008. IN THE FIRST COMMODITY, THERE WAS LOSS OF RS.20,476 / - AND IN THE SECOND, LOSS OF RS.2,76,609/ - . THE ASSESSEE WAS SHOW CAUSED AS TO WHY LOSSES FROM NCD EX TRADE AND M/S. PA TRADING COMPANY SHOULD NOT BE RE - COMPUTED ACCORDINGLY. REJECTING THE PLEA OF ASSESSEE SINCE THE TRADES OF NCD EX DID NOT REVEAL THE SAI D TWO TRADES, THE LOSS OF RS.20,47 7 / - AND RS.2,76,609/ - WERE DISALLOWED AND FURTHER PURCHASES OF RS.53,21,596/ - WERE NOT APPEARING AS PER NCD EX OF TRADES AND THE ACTUAL PURCHASES SHOWN WERE RS.75,18,254/ - . THE ASSESSING OFFICER THUS, RE - COMPUTED THE PROFIT S AT RS.50,44,988/ - , WHICH WAS ADDED TO THE INCOME OF ASSESSEE. THE SAME WAS SET OFF AGAINST THE TOTAL LOSSES SHOWN FROM M/S. PA TRADING COMPANY AND THE TOTAL SPECULATIVE PROFIT EARNED FROM THE TRANSACTION WAS COMPUTED AT RS.9,54,825/ - . ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 6 11. IN APPEAL, THE CONTENTION OF ASSESSEE WAS THAT THE TRANSACTION OF PURCHASE OF SOYA BEAN AND SALE OF POTATO WERE IN FACT CARRIED OUT ON NCDEX AND IN RESPECT OF THE SAID TRANSACTION, NCDEX HAD LEVIED PENALTY AT RS.26,600/ - FOR NOT DELIVERING / CLEARING THE OUTSTANDING POS ITION, WHICH WAS FINALLY SETTLED ON SETTLEMENT D ATE . THE CORRESPONDENCE WITH NCDEX, LEGAL & ADMINISTRATION DEPARTMENT IN RESPECT THEREOF WAS FILED BY THE ASSESSEE. THE EVIDENCE FILED BY THE ASSESSEE WAS AFTER THE DATE OF ASSESSMENT ORDER AND THE ASSESSEE MADE A REQUEST TO ADMIT THE SAME UNDER RULE 46A OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) . THE CIT(A) FORWARDED THE SAID EVIDENCE TO THE ASSESSING OFFICER FOR HIS COMMENTS, WHO IN TURN, OBJECTED TO ITS ADMISSION. HOWEVER, THE CIT(A) NOTED THA T THE SAID EVIDENCE WAS NECESSARY AS THE SAME GOES TO THE ROOT OF THE ISSUE AND HENCE, THE ASSESSING OFFICERS OBJECTIONS WERE OVERRULED AND EVIDENCES WERE ADMITTED. THE ASSESSEE IN REPLY TO THE REMAND REPORT, SUBMITTED THAT THE ASSESSING OFFICER HAD NOT GIVEN SUFFICIENT OPPORTUNITY AND AS SUCH THE EVIDENCE COULD NOT BE FILED. THE CIT(A) VIDE PARA 8.3 AT PAGE 9 OF THE APPELLATE ORDER HELD THAT IN VIEW OF THE CLARIFICATION ISSUED BY NCDEX, FILED BY THE APPELLATE ORDER HELD THAT IN VIEW OF THE CLARIFICATION ISSUED BY NCDEX, FILED BY THE ASSESSEE, IT IS CLEAR THAT THE SAID TRANSACTION OF PUR CHASE AND SALE OF SOYA BEAN AND POTATO HAD BEEN CARRIED OUT BY THE ASSESSEE ON NCDEX. THE ASSESSING OFFICER DID NOT APPRECIATE THAT IF UPTO SETTLEMENT D ATE , THE TRANSACTION COULD NOT BE COMPLETED, THEN THE SAME WA S TO BE SETTLED ON THE SETTLEMENT D ATE AS PER MARKET PRICE OF COMMODITY . THE CIT(A) ALSO TOOK NOTE OF THE FACT THAT FOR NON - DELIVERY OF 250 MT OF SOYA BEAN , AS PER THE CONTRACT OF AUGUST, 2008, NCDEX HAD LEVIED PENALTY AT RS. 26,600/ - , WHICH ITSELF PROVED THAT THE TRANSACTION WAS CARRIED OUT AND C OMPLETED BY NCDEX ON THE SETTLEMENT DATE. THE CIT(A) THUS, DELETED THE ADDITION OF RS.50,44,988/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON ACCEPTANCE OF SOYA BEAN AND ALSO DEL E TED ADDITION OF RS. 20,477/ - IN RESPECT OF NCDEX TRADE OF POTATO. THE CI T(A) FURTHER OBSERVED THAT THE PENALTY LEVIED BY NCDEX OF RS.26,600/ - WAS TO ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 7 BE DISALLOWED AND HENCE, ADDITION OF RS.50,65,465/ - WAS DELETED EXCEPT TO THE EXTENT OF RS.26,600/ - . 12. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 14. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A) AND POINTED OUT TH AT IN RESPECT OF SALE OF POTATO, THE STOCK E XCHANGE HAD SUSPENDED TRADING WHERE THE ASSESSEE HAD PURCHASED FUTURE CONTRACT POTATO AND WHERE THERE WAS DIRECTIVE TO CLOSE FUTURE CONTRACTS BY THE SETTLEMENT DATE IN JUNE, 2008 . HE PLEADED THAT SINCE THERE WAS NO TRADE AND ONLY CLOSING OF ACCOUNTS, HENC E, THERE WAS NO TRANSACTION OF EXCHANGE. OUR ATTENTION WAS DRAWN TO THE CIRCULARS PLACED AT PAGES 71 AND 72 OF THE PAPER BOOK IN THIS REGARD. FURTHER, THE CIRCULARS PLACED AT PAGES 71 AND 72 OF THE PAPER BOOK IN THIS REGARD. FURTHER, OUR ATTENTION WAS DRAWN TO THE E - MAIL RECEIVED FROM NCDEX, WHICH CONFIRMS THE SAID POSITION, COPY OF WH ICH IS PLACED AT PAGE 66 OF THE PAPER BOOK. IN RESPECT OF TRANSACTION IN SOYA BEAN , IT WAS POINTED OUT THAT THE DETAILS OF TRANSACTIONS ARE PROVIDED AT PAGE 82 OF THE PAPER BOOK, UNDER WHICH THE EXPIRY DATE WAS 20.08.2008. THE ASSESSEE CLAIMS THAT 480 QU INTALS WERE SOLD FROM THE PERIOD 22.07.2008 TO 02.08.2008 AND AS PER TRADING IN FUTURE COMMODITIES, THE ASSESSEE HAD THE OPTION EITHER TO ENTER THE PURCHASE OR TO PAY THE AMOUNT. HE FURTHER POINTED OUT THAT AFTER SELLING 480 QUINTALS, THE ASSESSEE BOUGHT 480 QUINTALS AND HE SETTLED 200 QUINTALS @ RS.2660/ - , ALTHOUGH THE PURCHASE WAS @ RS.2685/ - . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SINCE THE ASSESSEE DID NOT PURCHASE 200 QUINTALS OF SOYA BEAN , PENALTY OF RS.26,600/ - WAS LEVIED AND THE ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 8 PERUSAL OF DOCUMENTS AT PAGE 75 OF THE PAPER BOOK WOULD REFLECT THE CLIENT CODE AND ASSESSEES CODE WHICH POINTS OUT THAT THE TRANSACTION WAS ON NCDEX. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS ENGAGE D IN FORWARD TRADING IN COMMODITIES , IN WHICH TRANSACTION IN COMMODITIES IS COMPLETED WITHOUT DELIVERY OF GOODS. THE ASSESSEE WAS CARRYING ON THE TRANSACTION THROUGH M/S. PA TRADING COMPANY, WHICH IN TURN, WAS CARRIED OUT ONLINE OF NCDEX. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER SOUGHT INFORMATION FROM NCDEX REGARDING TRADES UNDERTAKEN BY THE ASSESSEE FOR THE PERIOD UNDER CONSIDERATION. FURTHER, INFORMATION WAS ALSO RECEIVED FROM M/S. PA TRADING COMPANY IN RESPECT OF TRADES UNDE RTAKEN BY THE ASSESSEE. ON COMPARISON, IT WAS FOUND THAT TWO TRADES; ONE IN POTATO AND THE OTHER IN SOYA BEAN , WERE NOT REFLECTED IN NCDEX AND HENCE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD WRONGLY COMPUTED SPECULATION LOSS. THE ASSES SEE HAD CLAIM ED SPECULATION LOSS OF RS.41,10,640 / - AS AGAINST WHICH, THE ASSESSING OFFICER COMPUTED SPECULATION LOSS OF RS.41,10,640 / - AS AGAINST WHICH, THE ASSESSING OFFICER COMPUTED THE SPECULATIVE PROFIT FROM M/S. PA TRADING COMPANY AT RS. 9,54,825/ - AND HENCE, ADDITION OF RS. 50,65,465/ - WAS MADE IN THE HANDS OF ASSESSEE. THE ASSESSING OFFICER DID NOT ACCEPT THE PURCHASES IN RESPECT OF TRANSACTION IN SOYA BEAN TO THE EXTENT OF RS.50,44,988/ - ON THE PREMISE THAT NO SUCH PURCHASES APPEARED AS PER NCDEX TRADING. FURTHER, THE ASSESSING OFFICER ALSO DID NOT ACCEPT THE TRANSACTION IN RESPECT OF POTATO AND MADE ADDITION OF LOSS CLAIMED AT RS.20,477/ - , SINCE THE SAID TRANSACTION ALSO DID NOT APPEAR ON NCDEX. THE EXPLANATION OF ASSESSEE WAS THAT THE ASSESSING OFFICER HAD PROVIDED ONLY PERIOD OF TWO DA Y S TO EXPLAIN THE TRANSACTION AND WITHIN SUC H SHORT PERIOD, THE NECESSARY CONFIRMATION AND EXPLANATION FROM NCDEX COULD NOT BE OBTAINED. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE FURNISHED CORRESPONDENCE WITH NCDEX, LEGAL & ADMINISTRATIVE DEPARTMENT, WHICH IS DATED ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 9 16.01.2012, UNDER WHICH IT WAS EXP LAINED THAT THE ASSESSEE HAD IN FACT PURCHASED SOYA BEAN AND THE TRANSACTION WAS SETTLED ON 20.08.2008 AT THE FINAL SETTLEMENT PRICE AND PENALTY OF RS.26,600/ - WAS LEVIED IN RESPECT OF SAID TRANSACTION FOR NOT DELIVERING/ CLEARING OUTSTANDING POSITION. AN OTHER LETTER DATED 17.01.2012 WAS ALSO FILED BY THE ASSESSEE FROM NCDEX CLARIFYING THAT THE TRANSACTION IN RESPECT OF POTATO HAS BEEN ENTERED INTO ON 18.03.2008 AND SETTLED ON 08.05.2008 , SINCE THE CONTRACT WAS SUSPENDED AS PER CIRCULAR ISSUED BY NCDEX. T HE COPY OF CORRESPONDENCE CIRCULAR THAT DATED 08.05.2008 REGARDING SUSPENSION OF POTATO CONTRACT AND CIRCULAR DATED 20.08.2008 REGARDING FINAL SETTLEMENT PRICE OF SOYA BEAN AND DEBIT NOTE ISSUED BY NCDEX IN RESPECT OF PENALTY OF RS. 26,600/ - W ERE FILED BY T HE ASSESSEE BEFORE THE CIT(A) AS ADDITIONAL EVIDENCE. ADMITTEDLY, THE CORRESPONDENCE WITH NCDEX WAS AFTER THE DATE OF ASSESSMENT ORDER AND WAS ADDITIONAL EVIDENCE FILED BEFORE THE CIT(A). IN VIEW OF THE PROVISIONS OF RULE 46A OF THE RULES VIS - - VIS ADMIS SION OF ADDITIONAL EVIDENCE, THE CIT(A) FORWARDED THE SAME TO THE ASSESSING OFFICER, WHO OBJECTED TO ITS ADMISSION, AS ACCORDING TO HIM, SUFFICIENT TIME WAS GIVEN TO THE OBJECTED TO ITS ADMISSION, AS ACCORDING TO HIM, SUFFICIENT TIME WAS GIVEN TO THE ASSESSEE TO EXPLAIN ITS CASE, WHO HAD NOT EXPLAINED THE SAME. HE REITERATED THAT THE ADDITION MADE IN THE HANDS OF ASSESSEE SHOULD BE UPHELD IN RESPECT OF BOTH THE TRANSACTIONS. HOWEVER, THE CIT(A) ADMITTED THE SAME AND DECIDED THE ISSUE AFTER CONSIDERING THE EXPLANATION OF ASSESSEE. THE GRIEVANCE OF ASSESSING OFFICER VIS - - VIS ADDITION MADE IN THE HANDS OF ASSESSEE WAS THAT THE TRANSACTION CLAIMED TO BE ENTERED INTO BY THE ASSESSEE IN RESPECT OF TRADE IN POTATO AND SOYA BEAN WERE NOT REFLECTED ON NCDEX. HOWEVER, THE ASSESSEE HAD FILED CLARIFICATION FROM NCDEX, IN WHICH THE SAID BODY HAD ADMITTED THAT THE ASSESSEE HAD IN FACT PURCHASED THE COMMODITIES I.E. SOYA BEAN OF RS. 53,21,596/ - ON FINAL SETTLEMENT PRICE ON THE EXPIRY DATE OF CONTRACT I.E. 20.08.2008. THE EXPLANATION OF NCDEX VIDE LETTER DATED 16.01.2012 READS AS UNDER: - ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 10 IN CASE OF TRADE IN SOYABIN REFERRED TO IN INCOME - TAX LETTER , THE SAID TRADE FOR 200 MT IS A CLOSE OUT ENTRY ENTERED BY THE YOU/MEMBER TO CLOSE THE CLIENT OPEN POSITION OF 200MT IN SOYABIN AUGUST, 2008 EXPIRY CONTRACT ON 20/8/2008, WHICH IS THE EXPIRY DATE OF THE CONTRACT AT THE FINAL SETTLEMENT PRICE OF RS.2660/ - PER MT. 16. IN VIEW OF THE CLARIFICATION FILED BY NCDEX, WHEREIN THE TRANSACTION WAS SETTLED ON FINAL SETTLEMENT DATE IN RESPECT OF PURCHASE OF 200 MT OF SOYA BEAN COSTING RS.53,21,596/ - WITHOUT DELIVER Y AND WHERE PENALTY OF RS.26,600/ - WAS LEVIED BY NCDEX IN RESPECT OF NON - DELIVERY OF 200 MT OF SOYA BEAN AS PER CONTRACT OF AUGUST, 2008, THE EXPLANATION OF ASSESSEE THAT THE TRANSACTION WAS COMPLETED BY NCDEX BY DEBITING THE AMOUNT TOWARDS PURCHASE COST O N THE SETTLEMENT DATE, EXPLAINS THE CASE OF THE ASSESSEE AND NO ADDITION IS WARRANTED IN THE HANDS OF ASSESSEE IN THIS REGARD. AS PER PROCEDURE FOLLOWED ON THE COMMODITIES EXCHANGE, THE ASSESSEE CAN ENTER INTO FORWARD CONTRACT, UNDER WHICH IT CAN SELL THE PRODUCTS ON EARLIER DATE AND THE PURCHASE IN RESPECT THEREOF HAS TO BE UNDERTAKEN ON THE EXCHANGE ITSELF BY THE ASSESSEE BEFORE THE SETTLEMENT DATE. ADMITTEDLY, IN RESPECT OF 200 MT OF SOYA BEAN , THE ASSESSEE COULD NOT PURCHASE THE SAID PURCHASES AND AS SUCH HE SETTLED THE THE ASSESSEE COULD NOT PURCHASE THE SAID PURCHASES AND AS SUCH HE SETTLED THE CONTRACT ON FINAL SETTLEMENT DATE, WHEREIN NCDEX DEBITED THE ASSESSEE TOWARDS PURCHASE COST OF RS.53,21,596/ - ON 20.08.2008 . THE SAID ENTRIES ARE REFLECTED IN THE COPY OF ACCOUNTS OF ASSESSEE ON NCDEX. ANOTHER ADDITIONAL FEATURE IN SU PPORT OF THE SAID TRANSACTION IS PENALTY OF RS.26,600/ - LEVIED BY NCDEX FOR NON - DELIVERY OF 200 MT OF SOYA BEAN AS PER THE CONTRACT. IN VIEW THEREOF, WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD AND THE PURCHASE COST OF SOYA BEAN IS ACCEPTED AS SUCH. 1 7. IN RESPECT OF SECOND TRANSACTION OF POTATO TRADING, THE ASSESSEE HAD CLAIMED LOSS OF RS.20,477/ - . THE ASSESSEE IN ORDER TO EXPLAIN THE SAID TRANSACTION, ALSO FILED AN EXPLANATION OF NCDEX DATED 17.01.2012. THE SAID TRANSACTION WAS ENTERED INTO ON 18.0 3.2008 AND HAD TO BE SETTLED ON 08.05.2008 AS THE TRADING IN POTATO WAS SUSPENDED AS PER CIRCULAR ISSUED BY NCDEX. ONCE THE CONTRACT HAS BEEN ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 11 SUSPENDED, THEN IT IS THE DUTY OF ASSESSEE TO SETTLE ITS CONTRACT WITHOUT PURCHASE / SALE OF SAID COMMODITIES BEI NG REFLECTED ON THE COMMODITIES EXCHANGE. THE NECESSARY COMMUNICATION IN THIS REGARD HAD ALSO BEEN FILED BEFORE US AND TAKING THE SAME INTO CONSIDERATION, WE UPHOLD THE ORDER OF CIT(A) IN ALLOWING THE LOSS ON ACCOUNT OF TRANSACTION IN POTATO OF RS.20,477/ - . ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.50,65,465/ - EXCEPT TO THE EXTENT OF RS.26,600/ - , WHICH WAS DISALLOWED BEING PENALTY LEVIED BY NCDEX. THE GROUNDS OF APPEAL NO.3 TO 5 RAISED BY THE REVENUE ARE THUS, DISMISSED. 18. THE THIRD ISSUE RAISED BY THE REVENUE BY WAY OF GROUNDS OF APPEAL NO.6 TO 10 IS AGAINST THE TREATMENT OF INCOME OF RS. 45,22,120/ - AS SPECULATIVE INCOME AS AGAINST THE ORDER OF ASSESSING OFFICER IN HOLDING THE SAME TO BE INCOME FROM OTHER SOURCES . 19 . BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD DECLARED SPECULATION 19 . BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD DECLARED SPECULATION INCOME OF RS.45,22,120/ - ON ANOTHER EXCHANGE I.E. MCX AUTHORITIES. THE ASSESSING OFFICER SOUGHT INFORMATION FROM MCX AUTHORITIES, WHICH IN TURN, INFORMED THAT THE ASSESSEE FIRM WAS NOT THE CLIENT OF M/S. A1 COMMODITIES & FINANCIAL SERVICES . THE SAID CONCERN ALSO CONFIRMED THAT THE ASSESSEE WAS NOT ITS REGISTERED CLIENT AND THE INFORMATION AND DOCUMENTS PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WERE CLAIMED TO BE NOT DELIVERED AND SIGNED BY THE M . THE ASSESSEE ON THE OTHER HAND, POINTED OUT THAT ONLINE TRANSACTION WAS CARRIED OUT BY IT ON PORTAL OF MCX AUTHORITIES AS CLIENT OF M/S. A1 COMMODITIES & FINANCIAL SERVICES. HOWEVER, IN VIEW OF THE INFORMATION RECEIVED, THE ASSESSING OFFICER HELD THAT THE SAID TRANSACTIONS WERE NON - GENUINE . O N THE OTHER HAND, SINCE THE ASSESSEE HAD DEPOSITED THE SAID AMOUNT IN ITS BANK ACCOUNT, THE SAME WAS TREATED AS INCOME FROM OTHER SOURCES. ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 12 20. BEFORE THE CIT(A), THE CONTENTION OF ASSESSEE WAS THAT THE INFORMATION WAS CALLED FOR UNDER SECTION 133(6) OF THE ACT FROM M/S. A1 COMMODITIES & FINANCIAL SERVICES, MUMBAI, IN WHICH THEY INFORMED THAT M/S. SANJAY UDYOG WAS NOT THEIR CLIENT AND WAS NOT REGISTERED WITH THEM. THEY ALSO STATE D THAT THE INFORMATION AND DOCUMENTS PRODUCED BY M/S. SANJAY UDYOG I.E. ASSESSEE BEFORE US WERE NOT SIGNED AND DELIVERED BY THEM. ANOTHER COMMUNICATION WAS ALSO RECEIVED FROM MCX AUTHORITIES THAT THE ASSESSEE WAS NOT REGISTERED AS CLIENT OF M/S. A1 COMMOD ITIES & FINANCIAL SERVICES. THE ASSESSEE FILED THE COPY OF LEDGER ACCOUNTS EXTRACT IN THE BOOKS OF M/S. A1 COMMODITIES & FINANCIAL SERVICES BEFORE THE CIT(A) AND POINTED OUT THAT IT WAS NOT AWARE WHETHER THEY WERE REGISTERED CLIENTS OF M/S. A1 COMMODITIES & FINANCIAL SERVICES. HOWEVER, THE SAID LEDGER ACCOUNTS CONTAINS ENTRIES IN RESPECT OF PROFITS EARNED IN RESPECT OF COMMODITIES TRANSACTIONS, AGAINST WHICH THE ASSESSEE HAD RECEIVED THE CONTRACT NOTE CUM BILLS FROM THE SAID PARTY. FURTHER, THE PROFIT AM OUNTING TO RS. 45,22,121/ - WAS PAID BY M/S. A1 COMMODITIES & FINANCIAL SERVICES THROUGH ACCOUNT PAYEE CHEQUE DURING THE MONTHS OF MARCH, 2009 FINANCIAL SERVICES THROUGH ACCOUNT PAYEE CHEQUE DURING THE MONTHS OF MARCH, 2009 AND AUGUST, 2009. THE ASSESSEE CLAIMED THAT THE SAID TRANSACTIONS APPEARING IN THE LEDGER ACCOUNT WERE SUPPORTED B Y 60 CONTRACT NOTES AND BILLS RECEIVED FROM THE SAID CONCERN. FURTHER, CHEQUES WERE ALREADY RECEIVED FROM THE SAID PARTY AND DEPOSITED IN THE BANK ACCOUNT. THE NEXT PLEA BEFORE THE CIT(A) WAS THAT M/S. A1 COMMODITIES & FINANCIAL SERVICES HAD NOT DENIED T HE TRANSACTIONS APPEARING IN THE SAID LEDGER ACCOUNT AND HAD ALSO NOT DENIED THE PAYMENTS RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE BANK CHEQUES. THE ASSESSEE IN THIS REGARD STATED THAT CROS S - EXAMINATION OF THE PROPRIETOR, DIRECTOR OR PARTNERSHIP OF M/S. A1 COMMODITIES & FINANCIAL SERVICES SHOULD BE ALLOWED. THE ASSESSEE CLAIMED THAT THE SAID EXPLANATION WAS FILED BEFORE THE ASSESSING OFFICER , WHO HAD IGNORED THE SAME AND EVEN HAD MADE ADDITION WITHOUT VERIFYING THE FACTS AND WITHOUT ALLOWING CROSS - ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 13 E XAMINATION OF THE SAID PARTIES. ANOTHER CONTENTION RAISED BY THE ASSESSEE WAS THAT THE ASSESSING OFFICER HAD VERIFIED THE CHEQUE PAYMENTS MADE BY M/S. A1 COMMODITIES & FINANCIAL SERVICES TO THE ASSESSEE FROM BANK OF BARODA DIRECTLY BY ISSUING SUMMONS UNDE R SECTION 131 O F THE ACT TO THE BANK MANAGER AND HENCE, CREDIT OF RS.45,22,121/ - STOOD PROVED. THEREFORE, THERE WAS NO MERIT IN THE ORDER OF ASSESSING OFFICER IN RELYING ON THE FALSE STATEMENTS MADE BY M/S. A1 COM MODITIES & FINANCIAL SERVICES. 21. THE SE COND ASPECT OF THE ISSUE THAT WHETHER COMMODITIES TRANSACTIONS WERE EFFECTED ON NCDEX / MCX AUTHORITIES. THE ASSESSEE CLAIMED WITHOUT PREJUDICE THAT THE NATURE OF TRANSACTIONS ENTERED INTO BY IT EVEN AFTER ASSUMING THAT WHEN THE TRADING WAS NOT DONE THROU GH MCDEX / MCX AUTHORITY, WAS COVERED BY THE PROVISIONS OF SECTION 43(5) OF THE ACT AS SPECULATIVE TRANSACTIONS. THE ASSESSEE IN THIS REGARD PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN MUKESH R. MAROLIA VS. ADDL. CIT 2006), 6 SOT 247 (M UM) AND ACIT VS. SHRI RAVINDRAKUMAR R. MAROLIA VS. ADDL. CIT 2006), 6 SOT 247 (M UM) AND ACIT VS. SHRI RAVINDRAKUMAR TOSHNIWAL IN ITA NO.5302/MUM/2008, DATED 24.06.2008. THE CIT(A) DELIBERATED UPON THE ISSUE AND HELD THE TRANSACTION TO BE GENUINE HOLDING THAT OFF MARKET TRANSACTIONS ARE NOT UNLAWFUL AND WHERE THE TRANSACTION OF ASSESS EE WAS EVIDENCED BY CONTRACT NOTE S AND PAYMENT WAS THROUGH BANK ACCOUNT, THE SAME IS TO BE TREATED AS SPECULATIVE INCOME OF THE ASSESSEE AS THE TRANSFER TRANSACTION WAS SETTLED WITHOUT DELIVERY OF GOODS. 22. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF C IT(A). 23. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 14 24. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AF TER TAKING US THROUGH THE FACTUAL ASPECTS OF THE CASE AND THE ENQUIRIES MADE BY THE ASSESSING OFFICER FROM MCX AND ALSO THE ENQUIRIES MADE FROM BANK, FROM WHICH THE AMOUNT WAS RECEIVED BY THE ASSESSEE, POINTED OUT THAT THERE WAS NO MERIT IN THE ORDER OF ASSESSING OFFICER IN DENYING THE CLAIM OF ASSESSEE. HE FURTHER STRESSED THAT IN CASE M/S. A1 COMMODITIES & FINANCIAL SERVICES HAD DENIED THE SAID TRANSACTION, THEN THE NECESSARY COURSE OF ACTION WAS TO ALLOW CROSS - EXAMINATION OF THE SAID PARTY, AS ASKED FOR BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER DOES NOT ALLOW THE SAME. HE FURTHER STRESSED THAT THE ASSESSEE BE ALLOWED TO CROSS - EXAMINE THE SAID PERSON AND THE ISSUE MAY BE REMITTED TO THE FILE OF ASSESSING OFFICER IN THIS REGARD. 25. ON PERUSAL OF RECORD AND VARIOUS EVIDENCES FILED BY THE ASSESSEE AND AFTER HEARING BOTH TH E LEARNED AUTHORIZED REPRESENTATIVES, WE FIND THAT VIDE PRESENT GROUNDS OF APPEAL, THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN HOLDING THAT THE SPECULATIVE INCOME OF RS.45,22,121/ - IS TO BE ASSESSED AS SPECULATIVE PROFIT THAT THE SPECULATIVE INCOME OF RS.45,22,121/ - IS TO BE ASSESSED AS SPECULATIVE PROFIT IN THE HANDS OF ASSESSE E AS AGAINST THE ORDER OF ASSESSING OFFICER IN ASSESSING THE SAME AS INCOME FROM OTHER SOURCES. THE ASSESSEE CLAIMS THAT AS IN CASE OF NCDEX, THE ASSESSEE HAD ALSO ENTERED INTO CERTAIN TRANSACTIONS OF ANOTHER PORTAL I.E. MCX AUTHORITIES FOR COMMODITIES TRANSACTIONS. THE ASSESSEE CLAIMS THAT IT WAS CLIENT OF M/S. A1 COMMODITIES & FINANCIAL SERVICES AND HAD ENTE RED INTO SERIES OF TRANSACTION NUMBERS 60. THE ASSESSEE HAS FURNISHED THE INFORMATION OF SALE AND PURCHASE OF COMMODITIES WITHOUT DELIVERY OF GOO DS AND HAD WORKED OUT THE SPECULATIVE PROFIT AT THE CLOSE OF YEAR AT RS. 45,22,121/ - . THE ASSESSING OFFICER ON THE OTHER HAND, SOUGHT INFORMATION FROM THE AUTHORITIES / CONCERNS AND M/S. A1 COMMODITIES & FINANCIAL SERVICES HAS REPORTED THAT THE ASSESSEE WA S NOT HIS CLIENT. HOWEVER, O N THE OTHER HAND, THE ASSESSEE HAS STRESSED THAT THE SAID PROFIT OF ABOUT ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 15 RS.45 LAKHS WAS RECEIVED BY THE ASSESSEE THROUGH BANK CHEQUES, WHICH WERE DRAWN ON M/S. A1 COMMODITIES & FINANCIAL SERVICES. IN THIS REGARD, THE ASSESSE E PLACED RELIANCE ON THE EVIDENCE COLLECTED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 133(6) OF THE ACT. HE FURTHER POINTED OUT THAT IN CASE ANY EVIDENCE IS TO BE USED AGAINST THE ASSESSEE, THEN THE SAME CAN BE USE D ONLY AFTER THE ASSESSEE IS ALLOWED CROSS - EXAMINATION OF THE PERSON DENYING THE TRANSACTION. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY STRESSED THAT IN VIEW OF THE COMPLETE EVIDENCE AVAILABLE WITH THE ASSESSEE, THE SPECULATION PRO FIT SHOWN BY THE ASSESSEE MERITS TO BE ASSESSED AS SUCH. FURTHER, STRICTLY IN THE ALTERNATE, HE SUBMITTED THAT WHERE THE ASSESSEE HAD ASKED FOR CROSS - EXAMINATION OF WITNESS OF ASSESSING OFFICER, WHO HAD NOT ALL OWED THE SAID CROSS - EXAMINATION, THE ADDITION IS NOT WARRANTED IN THE HANDS OF ASSESSEE WITHOUT ALLOWING CROSS - EXAMINATION. HOWEVER, IN THE INTEREST OF JUSTICE, HE FURTHER STATED THAT AN OPPORTUNITY SHOULD BE ALLOWED TO THE ASSESSEE TO CROSS - EXAMINE THE SAID WITNESS I.E. M/S. A1 COMMODITIES & FINANC IAL SERVICES. M/S. A1 COMMODITIES & FINANC IAL SERVICES. 26. IN THE ENTIRETY OF THE ABO VE SAID FACTS AND CIRCUMSTANCES AND FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, WE HOLD THAT THE CONTENTION OF ASSESSEE IN THIS REGARD NEEDS TO BE ACCEPTED. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO AL LOW C ROSS - EXAMINATION TO THE ASSESSEE, IN VIEW OF VARIOUS CONTRACT NOTES FILED BY THE ASSESSEE AND ALSO IN VIEW OF THE FACT THAT THE ASSESSEE IS RECIPIENT OF THE SAID AMOUNT OF ABOUT RS.45 LAKHS ON ACCOUNT OF FORWARD CONTRACT TH R OUGH CHEQUES ISSUED BY THE SAID CONCERN, WHICH IN TURN, WERE DEBITED TO HIS BANK ACCOUNT. THE ASSESSING OFFICER IN THIS REGARD HAD RECEIVED INFORMATION FROM THE CONCERNED BANK. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE REMIT THIS ISSUE BACK TO THE FILE OF ASSES SING OFFICER , WHO SHALL DECIDE THE SAME AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO ITA NO . 1 176 /PN/20 12 M/S. SANJAY UDYOG 16 THE ASSESSEE. THE GROUNDS OF APPEAL NOS.6 TO 10 RAISED BY THE REVENUE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, PARTLY ALLOWED. 2 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY SEPTEMBER , 201 6 . SD/ - SD/ - ( R.K. PANDA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 23 RD SEPTEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWA RDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A) - I , NASHIK ; 4. / THE C I T (CENTRAL), NAGPUR ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE
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