Jhamtani Jairam Ramchand, Pune V. Assistant Commissioner of Income-tax,

ITA 1346/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7228 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Unexplained investment; Business income; Depreciation; Income from undisclosed sources; Salary income; Opportunity of being heard; Principle of natural justice; Revised return
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1346 /P U N/20 1 4 / ASSESSMENT YEAR : 20 09 - 1 0 JHAMTANI JAIRAM RAMCHAND, C/O DINESH GULABANI, GULABANI & COMPANY, P.W.D. 5/2, ASHOK CINEMA ROAD, PIMPRI, PUNE 411017 . / APPELLANT PAN:A AYPJ2708E VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 8, PUNE . / RESPONDENT / APPELLANT BY : S HRI DINESH RAMESH GULABANI / RESPONDENT BY : S HRI MUKESH JHA, J CIT / DATE OF HEARING : 0 9 . 10 .2017 / DATE OF PRONOUNCEMENT: 31 . 1 0.2017 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT(A) - V , PUNE , DATED 26 . 0 3 .201 4 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 2 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND 1 ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITIONS OF 67,500/ - AS INCOME FROM SALARY ONLY ON ACCOUNT OF ITS DATA THOUGH APPELLANT HAS NEVER WORKED ON SALARY WITH GE INDUSTRIAL SYSTEMS LTD., DURING THE PREVIOUS YEAR UNDER APPEA L. 2 ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, THE LEARNED ASSESSING OFFICE IS NOT JUSTIFIED IN MAKING ADDITION OF RS.1,98,333/ - ON ACCOUNT OF INTEREST INCOME FROM LOAN GIVEN TO SHRI KRISHNA ASSOCIATES OUT OF THE FUNDS RECEIVED FROM PLOT SALE OF HIS LATE FATHER IN A SEPARATE SAVINGS ACCOUNT. 3 ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, THE LEARNED ASSESSING OFFICE IS NOT JUSTIFIED IN NOT ALLOWING THE APPELLANT INTEREST PAID TO SUNDARAM FINANCE & DEPRECIATION ON TRANSPORT VEHICLE AS AN EXPENSES AND ALSO NOT JUSTIFIED OTHERWISE IN NOT ACCEPTING THE APPELLANTS PRAY TO ASSESS THE TRANSPORT RECEIPTS OF RS.8,44,454/ - AS PER PROVISIONS OF LAW U/S 44AE WHILE ASSESSING THE INCOME OF THE ASSESSED . 4 ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, THE LEARNED ASSESSING OFFICE IS NOT JUSTIFIED IN NOT ALLOWING THE APPELLANT TO SET OFF THE LOSS OF SHARE TRADING WITH MOTILAL OSWAL SECURITIES LTD AMOUNTING TO RS.13,86,799 / - OUT OF THE TOTAL INCOME ASSESSED BY ASSESSING OFFICER. 3. THE ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS OF APPEAL WHICH READ AS UNDER: - I ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, WITHOUT PREJUDICE TO THE GROUNDS ASKING TO DELETE THE ADDITIONS IT BE HELD THAT THE ADDITIONS OF RS.67,500/ - IS MADE ON ACCOUNT OF SALARY INCOME, ADDITIONS OF RS . 1,98,333/ & RS.1831/ - IS MADE ON ACCOUNT OF INTEREST INCOME AND ADDITIONS OF RS.17,26,164/ - (RS.18,69,439 - 1,43,285) IS MADE O N ACCOUNT OF BUSINESS INCOME BEING UNDISCLOSED BUT FROM EXPLAINED SOURCES FALLING WITHIN THE SCOPE SECTION 14 OF INCOME TAX ACT, 1961. II ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, WITHOUT PREJUDICE TO THE GROUNDS ASKING TO DELETE THE ADDITIONS IT BE HELD THAT THE APPELLANT WAS ENGAGED IN TRANSPORT BUSINESS WHICH WAS DISCLOSED TO THE ASSESSING OFFICER THAT APPELLANT IS OWNING A LIGHT TRANSPORT VEHICLE WHICH WAS FINANCED BY SUNDARAM FINANCE LTD. AND IT WAS NOT OBJECTED BY T HE ASSESSING OFFICER WHILE PASSING THE ASST. ORDER U/S 143(3). III ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, THE LEARNED CIT APPEALS PARTLY CONFIRMED ADDITIONS OF RS.18,69,439/ - WHICH INCLUDES RS.143 , 285/ - RECEIVED FROM S HREE KRISHNA ASSOCIATES AND THE SAME IS DOUBLE TAXED ON ACCOUNT OF UNACCOUNTED DEPOSITS INTO BANK ACCOUNT AS WELL AS PER ITS DATA/26AS REPORT TOWARDS INTEREST RECEIVED FROM SHREE KRISHNA ASSOCIATES OF RS.1,98,333/ - . 3 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND IV ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, THE APPELLANT PRAYS TO BE ALLOWED TO SET OFF LOSS FROM DERIVATIVES TRADING ACCOUNT AMOUNTING TO RS.2,98,009 / - AS PER STATEMENT OF MOTILAL OSWAL SECURITIES LTD. V ) ON THE FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW, THE APPELLANT PRAYS FOR LEAVE ON ACCOUNT OF NATURAL JUSTICE ON THE ISSUES OUSTED FROM RECORDS & SUBMISSIONS MADE AVAILABLE BEFORE ASSESSING OFFICER & CIT - APPEALS FOR WHICH PROPER GROUNDS ARE NOT RAISED BEFORE CIT - APPEALS BY THE AP PELLANT. 4. THE FIRST ISSUE RAISED BY THE ASSESSEE VIDE GROUND OF APPEAL NO.1 IS AGAINST THE ADDITION OF RS.67,500/ - . 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN TRADING IN STEEL AND STEEL BARS AND WAS PROPRIETOR OF M/S. JHAMTANI IRON TRADING OPERATING FROM S.NO.11/2/7, BEHIND JHAMTANI AGENCIES, PIMPRI, PUNE. SEARCH ACTION UNDER SECTION 133A OF THE ACT WAS CARRIED OUT AT THE PREMISES OF ASSESSEE ON 22.01.2009 AND THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS.18,06,980/ - ON ACCOUNT OF EXCESS STOCK. THE ASSESSEE E - FILED THE RETURN DECLARING TOTAL INCOME OF RS.38,21,770/ - . LATER, THE ASSESSEE FILED THE REVISED RETURN OF INCOME BY SETTING OFF OF CURRENT YEAR LOSS FROM SHARE TRADING ACTIVITY, WHICH WAS NOT SET OFF AT THE TIME OF ORIGINAL RETURN AND CLAIMED CARRIED FORWARD OF BALANCE LOSS . THE REVISED RETURN OF INCOME WAS FILED ON 27.07.2010 BY SHOWING TOTAL INCOME OF RS.22,13,044/ - . THE CASE OF ASSESSEE WAS SELECTED F OR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS PROVIDED WITH COPY OF ITS DATA AND REQUESTED TO FURNISH RECONCILIATION ALONG WITH RELEVANT EVIDENCES. IN REPLY, THE ASSESSEE FILED RECONC ILIATION OF ITS DATA AND RECEIPT OF RS.67,500/ - SHOWN BY THE DEDUCTOR GEI INDUSTRIAL SYSTEM LTD. AND RS.1,98,333/ - SHOWN BY SHREE KRISHNA ASSOCIATES WAS NOT SHOWN IN THE BOOKS OF ACCOUNT OF ASSESSEE. THE ASSESSEE EXPLAINED 4 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND THAT THE DATA AVAILABLE IN ITS W AS INCORRECT AS THE ASSESSEE HAD NEVER WORKED AS AN EMPLOYEE WITH GEI INDUSTRIAL SYSTEM LTD. THE ASSESSEE EXPLAINED THAT HE WAS FULL TIME INVOLVED IN HIS BUSINESS AT PIMPRI, PUNE AND HAD NO CONNECTION WITH THE CONCERN OPERATING FROM BHOPAL . THE ASSESSEE FAILED TO FURNISH ANY CLARIFICATION FROM THE DEDUCTOR, HENCE BECAUSE OF THE CASE GETTING TIME BARRED, THE ASSESSEE HAVING NOT OFFERED THE SALARY INCOME OF RS.67,500/ - , THE ASSESSING OFFICER MADE AN ADDITION IN THE HANDS OF ASSESSEE. IN RESPECT OF INTEREST OF RS.1,98,333/ - RECEIVED FROM SHREE KRISHNA ASSOCIATES, THE ASSESSEE ADMITTED THAT THE SAID INTEREST INCOME DUE TO MISTAKE OF ACCOUNTING, WAS NOT SHOWN AND HENCE, THE SAME WAS ALSO ADDED IN THE HANDS OF ASSESSEE. ANOTHER ADDITION WHICH WAS MADE IN THE H ANDS OF ASSESSEE WAS ON ACCOUNT OF DEPOSITS IN UNACCOUNTED BANK , WHICH INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER THROUGH ITS DATA. THERE WAS CASH DEPOSITED IN THE BANK ACCOUNT AND ALSO CHEQUE DEPOSITS, AGAINST WHICH THE ASSESSEE HAD MADE THE INVES TMENT IN SHARES. IN VIEW THEREOF, THE ASSESSING OFFICER MADE AN ADDITION ON ACCOUNT OF UNACCOUNTED INVESTMENTS TO THE EXTENT OF RS.32,75,246/ - . THE ASSESSEE HAD OFFERED UNACCOUNTED INCOME OF RS.18,69,439/ - ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNTS . THE ASSESSEE ALSO CLAIMED THAT DEPRECIATION ON VEHICLES AND OTHER EXPENSES FOR TRANSPORTATION, ETC. SHOULD BE ALLOWED. HOWEVER, IN THE ABSENCE OF THE ASSESSEE FURNISHING ANY DETAILS IN RESPECT THEREOF, THE SAID PLEA OF ASSESSEE WAS NOT ACCEPTED. ON GO ING THROUGH ANOTHER BANK ACCOUNT WHICH HAD A SINGLE DEPOSIT OF RS.14 LAKHS, THE ASSESSEE EXPLAINED THAT THE ADVANCE MADE IN EARLIER YEARS HAD BEEN RECEIVED BACK, FOR WHICH THE ASSESSING OFFICER HELD THAT ACTION WILL BE TAKEN IN EARLIER YEARS. HOWEVER, TOT AL INTEREST OF RS.1,43,285/ - WAS ADDED IN THE HANDS OF ASSESSEE AS THE ADDITION WAS EARLIER 5 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND MADE ON ACCOUNT OF DIFFERENCE IN ITS DATA. FURTHER, THE SAVINGS ACCOUNT INTEREST OF RS.1831/ - WAS ADDED IN THE HANDS OF ASSESSEE. 6. THE CIT(A) UPHELD THE ADDITION OF RS.67,500/ - BEING SALARY RECEIVED FROM GEI ON THE GROUND THAT IN CASE IT DID NOT RELATE TO THE ASSESSEE, THEN THE MATTER SHOULD HAVE BEEN FOLLOWED UP WITH THE CONCERNED COMPANY. FURTHER, ADDITION WAS ALSO CONFIRMED ON ACC OUNT OF INTEREST OF RS.1,98,333/ - RECEIVED FROM SHREE KRISHNA ASSOCIATES. THOUGH DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ADMITTED THAT IT HAD RECEIVED THE INTEREST FROM THE SAID CONCERN BUT BEFORE THE CIT(A), THE PLEA WAS RAISED THAT THE INCOME WAS OF THE HUF. THOUGH THE TDS WAS DEDUCTED IN THE NAME OF ASSESSEE, THIS ADDITION WAS ALSO CONFIRMED IN THE HANDS OF ASSESSEE BY THE CIT(A) IN THE ABSENCE OF ANY EVIDENCE. IN RESPECT OF THIRD ADDITION OF RS.32,75,246/ - ON ACCOUNT OF ENTRIES MADE IN THE BANK ACCOUNT WHICH WERE NOT DISCLOSED TO THE DEPARTMENT AND ADDITION OF RS.1831/ - BEING INTEREST INCOME, THE CIT(A) NOTED THE CONTENTION OF ASSESSEE THAT CERTAIN DEPOSITS PERTAINED TO EARLIER YEAR AND THE ADDITION HAS BEEN MADE IN EARLIER YEARS ON THE BASIS OF SAID CREDITS IN THE BANK ACCOUNTS. HOWEVER, IN THE PRESENT ASSESSMENT YEAR, THE ADDITION WAS MADE ON THE BASIS OF INVESTMENT MADE. THE ASSESSEE FURTHER CLAIMED THAT SIMILAR BASIS FOR ADDITION SHOULD BE ADOPTED IN THE INSTANT ASSESSMENT YEAR ALSO AND POINTED OUT THAT ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSITS TO THE TUNE OF RS.18,69,439/ - IS TO BE MADE. THE CIT(A) ACCEPTED THE RECONCILIATION STATEMENT SUBMITTED BY THE ASSESSEE AS PER PARA 12 OF THE APPELLATE ORDER AND RESTRICTED THE ADDITION TO RS.18,69,439/ - . AS FAR AS THE CLAIM OF DEPRECIATION AND BANK INTEREST ON VEHICLE, SINCE THE ASSESSEE HAD NOT FURNISHED ANY PROOF OF OWNERSHIP, THE CLAIM OF ASSESSEE WAS NOT ACCEPTED. 6 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND FURTHER, THE CIT(A) CONFIRMED THE ADDITION OF RS.1,831/ - ON ACCOUNT OF SAVINGS BANK ACCOUNT INTEREST. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. THE FIRST ISSUE WHICH HAS BEEN RAISED BY THE ASSESSEE IS AGAINST THE ADDITION OF RS.67,500/ - . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD POINTED OUT THAT THE ASSESSEE IS CARRYING ON ITS PROPRIETARY BUSINESS AT PIMPRI, PUNE AND H AS NEVER WORKED WITH THE SAID COMPANY AT BHOPAL. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO POINTED OUT THAT THE ASSESSEE HAD NO CONNECTION WITH THE SAID CONCERN AND IT WAS BECAUSE OF MISMATCHING OF CERTAIN INFORMATION THAT THE SAID INCOM E WA S REFLECTED IN THE HANDS OF ASSESSEE AND FOR A PERIOD OF TWO TO THREE MONTHS. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE REC ORD. WE FIND MERIT IN THE PLEA OF ASSESSEE WHERE IT WAS CARRYING OUT SOLE PROPRIETARY BUSINESS OF STEEL TRADING AT PIMPRI, PUNE. THE ITS DATA NO DOUBT, TALKS ABOUT SALARY RECEIVED IN THE NAME OF ASSESSEE BUT FROM A COMPANY WHICH IS OPERATING IN BHOPAL. THE ASSESSEE WAS UNABLE TO GET THE DETAILS VERIFIED BUT MERELY ON THE BASIS OF MISMATCH OF DATA, NO ADDITION IS WARRANTED IN THE HANDS OF ASSESSEE. 11. IN RESPECT OF GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE WHICH IS AGAINST THE ADDITION OF RS. 1,98,3 33/ - ON ACCOUNT OF INTEREST INCOME FROM LOAN 7 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND GIVEN TO SHRI KRISHNA ASSOCIATES, THE PLEA OF ASSESSEE WAS THAT ONE ADDITION HAS BEEN MADE AS PER ITS DATA OF RS.1,98,333/ - . THE ASSESSEE HAD DEPOSITED INTEREST TO THE EXTENT OF RS.1,43,285/ - IN THE BANK ACCOUN T, WHICH WAS NOT DISCLOSED TO THE DEPARTMENT AND THE AMOUNT IS REFLECTED IN THE TOTAL DEPOSITS OF THE SAID BANK ACCOUNT. THIS ADDITION HAS BEEN MADE IN THE HANDS OF ASSESSEE AND BY MAKING ANOTHER ADDITION ON ACCOUNT OF ITS DATA, IT RESULTS IN DOUBLE ADDI TION. WE FIND MERIT IN THE CLAIM OF ASSESSEE IN THIS REGARD WHERE, IF AS PER ITS DATA , INTEREST OF RS.1,98,333/ - HAS BEEN SHOWN AS PAID TO THE ASSESSEE AND ON THE OTHER HAND, THE ASSESSEE WHILE COMPUTING THE DEPOSITS IN THE BANK ACCOUNT AND ADJUSTING THE DEBITS HAD INCLUDED THE INTEREST DEPOSITED IN THE SAID BANK ACCOUNT TO THE EXTENT OF RS.1,43,285/ - , AGAINST WHICH ADDITION TO THE EXTENT OF RS.18,69,439/ - HAS BEEN CONFIRMED BY THE CIT(A). HOWEVER, THESE ASPECTS NEED VERIFICATION AND WE DIRECT THE ASSESSING OFFICER TO VERIFY THE CLAIM OF ASSESSEE, IF THE SAME IS FOUND TO BE CORRECT, THEN BALANCE OF RS.55,048/ - IS TO BE ADDED IN THE HANDS OF ASSESSEE . O THERWISE, ADDITION OF RS. 1,98,333/ - IS TO BE UPHELD IN THE HANDS OF ASSESSEE. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS THUS, ALLOWED FOR STATISTICAL PURPOSES . 12. THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS IN NOT APPLYING THE PROVISIONS OF SECTION 44 AE OF THE ACT TO ASSESS THE TRANSPORT RECEIPTS IN THE HANDS OF ASSESSEE AND THEREAFTER, NOT ALLOWING THE INTEREST PAID TO SUNDARAM FINANCE & DEPRECIATION ON TRANSPORT VEHICLES. THE ASSESSEE HAD FAILED TO FURNISH THE DETAILS OF VEHICLES OWNED. THE ASSESSE E HAD FAILED TO FURNISH ANY PROOF OF OWNERSHIP OR USE OF VEHICLES AS WELL AS EARNING OF INCOME WITH DOCUMENTARY EVIDENCE IN RESPECT OF TRANSPORT BUSINESS. HENCE, THE CLAIM OF DEPRECIATION AS WELL AS BANK INTEREST ON VEHICLES LOAN WAS NOT ACCEPTED BY THE 8 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND A SSESSING OFFICER AND THE CIT(A). EVEN BEFORE US, THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE IN THIS REGARD AND IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE. 13. THE ASSESSEE HAS RAISED THE GROUND O F APPEAL NO.4, WHEREIN IT HAS RAISED THE ISSUE OF NOT ALLOWING THE ASSESSEE SET OFF OF LOSS OF DERIVATIVE TRADING WITH MOTILAL OSWAL SECURITIES LTD. AMOUNTING TO RS.13,86,799/ - AGAINST THE INCOME ASSESSED IN THE HANDS OF ASSESSEE. 14. THE PERUSAL OF THE ASSESSMENT ORDER AND THE APPELLATE ORDER REVEALS NO SUCH ISSUE HAVING BEEN RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US HAS POINTED OUT THAT BY AN ERROR, THIS ISSU E WAS NOT RAISED BEFORE THE AUTHORITIES BELOW. FURTHER, THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND OF APPEAL AND ALSO IT HAS RAISED NEW ISSUES. FIRST OF ALL, THE ISSUE RAISED IS BY WAY OF REGULAR GROUND OF APPEAL WHICH IN FACT IS AN ADDITIONAL GROUND OF APPEAL AND HENCE, THE SAME CANNOT BE ADJUDICATED. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IT HAS ALSO RAISED ADDITIONAL GROUND OF APPEAL. THE PERUSAL OF ADDITIONAL GROUNDS OF APPEAL FILED BY THE ASSESSEE REFLECTS THAT ADDITIONAL GROUNDS OF APPEAL ARE NOTHING BUT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL. THE SO - CALLED ADDITIONAL GROUNDS OF APPEAL ARE ARGUMENTATIVE AND DO NOT REFLECT THE NATURE OF GROUND SOUGHT TO BE RAISED. WE H AVE ALREADY DECIDED GROUNDS OF APPEAL NO.1 AND 2, WHICH IN FACT TAKES CARE OF GROUNDS OF APPEAL NO.1 AND 2 AS ADDITIONAL GROUNDS OF APPEAL. BY WAY OF ADDITIONAL GROUND OF APPEAL NO.4 , THE ASSESSEE SEEKS ALLOWANCE OF SET OFF OF LOSS FROM DERIVATIVE S TRADIN G ACCOUNT AMOUNTING TO RS.2,98,009/ - . IN THE GROUND OF 9 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND APPEAL NO.4, CLAIM WAS IN RESPECT OF RS.13,86,799/ - BEING THE LOSS OF SHARE TRADING FROM MOTILAL OSWAL SECURITIES LTD. AND IN ADDITIONAL GROUND OF APPEAL NO.4, RS.2,98,009/ - WAS ON ACCOUNT OF LOSS FRO M DERIVATIVES. THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS IN THIS REGARD IN WHICH IT CLAIM ALLOWING OF SET OFF OF LOS S OF RS.2,98,009/ - AND RS.13,86,799/ - ON ACCOUNT OF DERIVATIVES AND SHARE TRADING LOSS TO BE SET OFF AGAINST CURRENT YEAR BUSINESS INCOME. THE ASSESSEE FURTHER POINTS OUT THAT THE DERIVATIVES IN SHARE TRADING WAS DONE OUT OF AMOUNTS CREDITED TO THE UNDISCLOSED BANK ACCOUNT OR UNREPORTED ACTIVITIES, FOR WHICH THE AMOUNTS WERE DEPOSITED IN THE UNDISCLOSED BANK ACCOUNTS. THEREFORE, LOSS SUFFE RED FROM SUCH ACTIVITIES SHOULD BE SET OFF AGAINST DEPOSIT S / CREDITS IN THE UNDISCLOSED BANK ACCOUNTS. THE SAID PLEA WAS MADE UNDER SECTIONS 70 AND 71 OF THE ACT. HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF GUJARAT IN TAX APPE AL NO.290 OF 2013 IN THE CASE OF CIT VS. SHILPA DYEING & PRINTING MILLS PVT. LTD., JUDGMENT DATED 04.04.2013. 15. ON PERUSAL OF RECORD, WE FIND THAT INCOME HAS BEEN ASSESSED IN THE HANDS OF ASSESSEE ON THE BASIS OF ENTRIES IN UNDISCLOSED BANK ACCOUNTS, WHEREIN THE DEPOSITS WERE BOTH IN CHEQUE AND CASH. THE ASSESSING OFFICER AND THE CIT(A) ALSO NOTED THAT THE ASSESSEE HAD MADE APPLICATION OF FUNDS TO THE EXTENT OF RS.31,31,246/ - IN SHARES AND THERE WAS PAYMENT TO SUNDARAM FINANCE OF RS.1,44,000/ - . THE ASSESSING OFFICER THUS, ADDED SUM OF RS.32,75,246/ - ON THE BASIS OF INVESTMENTS MADE. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAS NOT APPLIED CONSISTENT APPROACH. HE FILED RECONCILIATION BEF ORE THE CIT(A), WHICH WAS ACCEPTED BY HIM AND THE ADDITION WAS RESTRICTED TO RS.18,69,439/ - . THE ASSESSEE IS NOT IN APPEAL AGAINST THE AFORESAID ADDITION. HOWEVER, THE ASSESSEE CLAIMS THAT OUT OF THE SAID ACCOUNT, IT 10 ITA NO. 1346 /PUN/20 14 JHAMTANI JAIRAM RAMCHAND HAD MADE INVESTMENTS AND HAS INCURRED LOSSES ON ACCOUNT OF SHARE TRADING AND DERIVATIVES. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE DEEM IT FIT TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER, WHO SHALL CONSIDER THE CLAIM OF ASSESSEE AND DECIDE THE ISSUE IN AC CORDANCE WITH LAW. THE ASSESSING OFFICER SHALL AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS THUS, ALLOWED AS INDICATED ABOVE. THE GROUNDS OF APPEAL AND ADDITIONAL GROUNDS OF APPEAL ARE THUS, PARTLY ALLOWED AS INDICATED ABOVE . 1 6 . IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE . ORDER PRONOUNCED ON THIS 3 1 S T DAY OF OCTO BER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 3 1 S T OCTO BER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - V , PUNE ; 4. THE C IT - V , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE