AI Insights
The case involves the revenue's appeal against the order of the CIT(A) which allowed the assessee's appeal regarding the treatment of commodity profits and the set-off of losses. The assessee, M/s. Shristi Ispat & Alloys Ltd., had declared a loss in its return for the assessment year 2014-15 but also reported substantial profits from commodity trading. The Assessing Officer had treated these profits as unexplained cash credits under section 68, but the CIT(A) reversed this decision, leading to the revenue's appeal. The Tribunal examined the evidence, including transaction details and banking records, and found the profits to be genuine. Furthermore, it was determined that the set-off of losses against these profits was permissible under the law as it stood prior to the amendment effective from April 1, 2017.
Appeal Details
Counselvise Citation
[2022] 140 COUNSELVISE.COM (IT) 133454 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 8 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-12-2022
Appeal Filed By
Department
Order Result
PartlyAllowed
Bench Allotted
A
Next Hearing Date
20-09-2022
Assessment Year
misc
Appeal Filed On
22-03-2021
Judgement Text
आयकर अपीलीय अिधकरण Ɋायपीठ, कोलकाता । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 DCIT, Circle-3(1), Kolkata Vs M/s. Shristi Ispat & Alloys Ltd. 21, Hemanta Basu Sarani 4 th Floor, Room No. 428 Kolkata - 700001 [PAN : AAJCS3887G] अपीलाथŎ/ (Appellant) Ů̝ यथŎ/ (Respondent) Assessee by : Shri A.K. Tulsiyan Revenue by : Shri Vijay Kumar, Addl. CIT सुनवाई की तारीख/Date of Hearing : 21/09/2022 घोषणा की तारीख /Date of Pronouncement: 13/12/2022 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The present appeal is directed at the instance of the revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 1, Kolkata, (hereinafter the “ld. CIT(A)”) dt. 25/04/2019, passed u/s 250 of the Income Tax Act, 1961 (“the Act’) for the Assessment Year 2014-15. 2. The revenue has raised the following grounds of appeal:- “1. The Ld. CIT(A) erred in law while allowing the disallowance u/s. 68 of Rs. 2,30,75,391/- as income chargeable to tax under the head 'Income from Business or Profession" instead of Commodity Profit made u/s. 68 of the Act. 2. Whether on the facts and circumstances of the case and in law, the Hon'ble CIT(A) was justified in deleting the addition of Rs. 1,56,74,037/- u/s. 68 by relying on the decision of ITAT, Kolkata in the case of DCIT, Circle-3(1), Kolkata vs. M/s. Atibir Hi-tech Pvt. Ltd. where in the said commodity profit was accepted as cash credit u/s. 68 by the Hon'ble ITAT? 3. In the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 7,60,123/- made by the AO on account of the employees contribution to PF/ESI as because it violates the provision of I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 2 Sec 36(1)(va) read with Sec 2(24)(x) of the IT Act and it contradicts the Board's Circular no. 22/2015 dated 17.12.2015, Para no. 5 where it is clarified that this circular does not apply to claim of deduction relating to employee's contribution to welfare fund which are governed by Sec 36(1)(va) of the Act". 4. The appellant craves leave to make any addition, alteration or modification etc. of the grounds either before the appellate proceedings, or in the course of appellate proceedings.” 3. Brief facts of the case are that the assessee is a Private Limited Company engaged in the business of manufacturing of TMT bars. Loss of Rs. 2,26,20,205/- was declared in the return filed for Assessment Year 2014- 15 on 26/11/2014. Case selected for scrutiny followed by service of valid notice u/s 143(2) & 143(1) of the Act. After considering the details filed by the assessee, the ld. Assessing Officer firstly made the disallowance u/s 36(1)(va) of the Act for the delayed payment of employees’ contribution towards PF & ESI at Rs.7,60,123/- The second issue raised by the assessing officer was regarding the genuineness of the commodity profit of Rs.2,30,75,391/- earned by the assessee through broker Sidhsilver Commodities Pvt. Ltd.. The ld. Assessing Officer observed that as per the exhaustive investigation report of the Directorate of Income Tax (Inv.), Sidhsilver Commodities Pvt. Ltd. was a key player in managing benefits of Indian beneficiaries through operators like Shri Neeraj Jain and a series of other players. The broker Sidhsilver Commodities Pvt. Ltd., was a member of Universal Commodity Exchange of India Ltd., which on account of financial mismanagement by its promoters, lost its status as a recognised exchange during August, 2015. Based on these observations, the ld. Assessing Officer held that the commodity profit of Rs.2,30,75,391/- earned by the assessee is a bogus income and the same needs to be added as unexplained cash credit u/s 68 of the Act and made the addition thereof I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 3 and also did not allow the set off of the alleged addition against the loss incurred by the assessee during the year. 4. Aggrieved the assessee preferred an appeal before the ld. CIT(A) who after detailed examination of the fact, first of all concluded that the assessee earned genuine income in the form of commodity profit and there are no discrepancies in the transactions. The alleged profit was received through banking channels and copies of bills and relevant contract notes were issued by the brokers in respect of the said transactions. Apart from holding the commodity profit as genuine income, the ld. CIT(A) further dealt with the alternate claim of the assessee that if the alleged commodity profit is treated as income u/s 68 of the Act, same is eligible for set off against the losses incurred by the assessee and the provisions of Section 115BBE of the Act are not applicable on the case of the assessee since they were inserted w.e.f. 01/04/2017. 5. Aggrieved, the revenue is in appeal before the Tribunal. 6. The ld. D/R vehemently argued supporting the orders of the ld. Assessing Officer. On the other hand, the ld. Counsel for the assessee apart from referring to the written submissions filed before the ld. CIT(A) and detailed findings of the ld. CIT(A) appearing in para 6 to 14 of the impugned order also referred to the CBDT Circular No. 11/2019 dated 19/06/2019 regarding clarification on allowability of set-off of losses against the deemed income u/s 115BBE of the Act, prior to Assessment Year 2017- 18. Reference was made to various decisions which are as under:- ITO vs. M/s Prism Share Trading Pvt. Ltd. (ITA No. 5650/Mum/2017 dated 30/11/2018) DCIT vs. M/s. Atbir Hi-Tech Pvt. Ltd. (ITA No. 1747/Kol/2017 dated29/03/2019) M/s. Skipper Ltd. vs. DCIT (ITA No. 55/Kol/2022 dated 09/09/2022) I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 4 DCIT vs. M/s. Atha Mines Pvt. Ltd. (ITA No. 601/Kol/2014 dated 05.04.2017) Vijaya Hospitality and Resorts Ltd. v. CIT in [2020] 114 taxmann.com 91 (Kerala) dated 07/03/2019 ACE Infracity Developers (P) Ltd. v. DCIT in [2021]127 taxmann.com 264 (Delhi-Trib.) Sangeet Resorts vs. DCIT in ITA No. 561/Chd/2019 dated 29/01/2020 Amirt Hatcheries Pvt. Ltd. vs. PCIT in ITA No. 915/Kol/2019 dated 06/09/2019 PCIT vs. Aacharan Enterprises(P) Ltd. in [2020] 1147 taxmann.com 745 (Rajasthan) dated 21/01/2020 Famina Knit Fabs vs. ACIT in [2019] 104 taxmann.com 306 (Chandigarh – Trib.) dated 08/02/2019 ACIT vs. Sanjay Bairathi Gems Ltd. [2017] 84 taxmann.com 139 (Jaipur – Trib.) dated 08/08/2017 Star Ply Board Ltd. vs. PCIT in ITA No. 668/CHD/2019 dated 22/01/2020. 7. We have heard the rival contentions and perused the material available on record. Through this appeal the revenue has raised three issues challenging the findings of the ld. CIT(A). Through Ground Nos. 1 & 2, two issues have been raised. Firstly, regarding the genuineness of the income earned by the assessee in the form of commodity profit and that whether the Assessing Officer was justified in making the addition u/s 68 of the Act and secondly, whether the ld. CIT(A) was justified in allowing the set-off of losses incurred during the year against the addition made u/s 68 of the Act. The third issue is regarding the disallowance u/s. 36(1)(va) of the Act for delay in deposit of employees’ contribution towards PF & ESI. 8. As far as Ground Nos. 1 & 2 are concerned, we notice that the assessee is mainly into the business of manufacturing of TMT bars. During I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 5 the year it entered into transactions of purchase and sale of commodities and earned a profit of Rs.2,30,75,391/-. These transactions were carried out through a broker, namely, Sidhsilver Commodities Pvt. Ltd.. The ld. Assessing Officer doubted the transactions of the said profit on account of linkage of the broker with Universal Commodity Exchange of India Ltd.. However, we find that apart from referring to the said investigation, no other concrete evidence have been put forth by the revenue authorities to prove that the commodity profit was an accommodative profit. The complete details including the contract notes, financial ledgers, bank statement showing the relevant transactions and the audited financial statements of the broker, assert this fact that the assessee has earned a genuine commodity profit. 8.1. Further as regards the allowing of set-off of current year losses against the addition made u/s 68 of the Act is concerned, though we have held above that the assessee has earned genuine commodity profit but even for academic discussion if it is presumed that the action of the Assessing Officer is found to be correct and the alleged commodity profit is treated as unexplained cash credit u/s 68 of the Act, even then the losses for the year which have not been disputed by the revenue authorities deserves to be set- off against the unexplained income u/s 68 of the Act. The restriction for set- off has been brought into the Act by the Finance Act, 2016 w.e.f. 01/04/2017. For better understanding of the issue, we will first go through Section 115BBE of the Act, which reads as follows:- “115BBE. 59 [(1) Where the total income of an assessee,— (a) includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D and reflected in the return of income furnished under section 139; or (b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a), the income-tax payable shall be the aggregate of— I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 6 (i) the amount of income-tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).] (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance 60 [or set off of any loss] shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) 61 [and clause (b)] of sub-section (1).]” 9. Now, going through sub-Section (2) of Section 115BBE of the Act, the words “set off of any loss” appearing in second line was inserted from 01/04/2017. Before this insertion, there was no bar on setting off of any losses incurred during the year against the income referred to in Section 68, 69, 69A, 69B, 69C or 69D of the Act. Further to remove the confusion, the CBDT has come out with a Circular being no. 11/2019 dated 19/06/2019 and made necessary clarification and the content of this Circular is reproduced below:- “With effect from 01.04.2017, sub-section (2) of section 115BBE of the Income-tax Act, 1961 (Act) provides that where total income of an assessee includes any income referred to in section(s) 68/69j69A/69B/69Cj69D of the Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under any provisions of the Act in computing the income referred to in section 115BBE(1) of the Act. 2. In this regard, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that in assessments prior to assessment year 2017- 18, while some of the Assessing Officers have allowed set off of losses against the additions made by them under Section(s) 68/69j69A/69B/69C/69D, in some cases, set off of losses against the additions made under Section 115BBE(1) of the Act have not been allowed. As the amendment inserting the words 'or set off of any loss' is applicable with effect from pt of April, 2017 and applies from assessment year 2017-18 onwards, conflicting views have been taken by the Assessing Officers in assessments for years prior to assessment year 2017-18. The matter has been referred to the Board so that a consistent approach is adopted by the Assessing Officers while applying provision of section 115BBE in assessments for period prior to the assessment year 2017-18. I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 7 3. The Board has examined the matter. The Circular No. 3/2017 of the Board dated 20th January, 2017 which contains Explanatory notes to the provisions of the Finance Act, 2016, at para 46.2, regarding amendment made in section 115BBE(2) of the Act mentions that currently there is uncertainty on the issue of set-off of losses against income referred to in section 115BBE. It also further mentions that the pre-amended provision of section 115BBE of the Act did not convey the intention that losses shall not be allowed to be set-off against income referred to in section 115BBE of the Act and hence, the amendment was made vide the Finance Act, 2016. 4. Thus keeping the legislative intent behind amendment in section 115BBE(2) vide the Finance Act, 2016 to remove any ambiguity of interpretation, the Board is of the view that since the term 'or set off of any loss' was specifically inserted only vide the Finance Act 2016, w.e.f. 01.04.2017, an assessee is entitled to claim set-off of loss against income determined under section 115BBE of the Act till the assessment year 2016- 17. 5. The contents of this Circular may be circulated widely for information of all stakeholders and departmental officers. The pending assessments and litigations on this issue may be handled accordingly.” 9.1. Going through the above Circular, there remains no ambiguity regarding interpretation that prior to 01/04/2017, the assessee is entitled to claim of set-off of losses in the income determined u/s 115BBE of the Act. Under the given facts and circumstances, we fail to find any infirmity in the following findings of the ld. CIT(A):- “6. I am adjudicating Grounds of Appeal No. 3 to 6 in a consolidated manner since the issues are same. It is observed from the impugned order dated 01.12.2016 that addition has been made u/s. 68 of the Income-tax Act, 1961 for commodity trading. The amount declared was Rs.2,30,75,391/- from commodity profit through broker, M/s. Sidhsilver Commodities Pvt. Ltd. The Investigation Wing carried out an operation and it was found that the broker, M/s. Sidhsilver Commodities Pvt. Ltd. was engaged in giving accommodation entries. The exchange through which the commodity was traded was Universal Commodity Exchange (UCX) had lost its status. It was observed that the Account of M/s. Sidhsilver Commodities Pvt. Ltd. also had various aberrations. For instance, there were no constant inflow of funds in the Account of the broker. The ld. A.O. proceeded to make an addition of Rs.2,30,75,391/-. 7. Mr. A.K. Tibrewal appeared on behalf of the assessee. He has produced the copy of Ledger Account of M/s. Sidhsilver Commodities Pvt. Ltd., copy of bank I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 8 statement of the relevant period in which the RTGS cheques were received from the broker, copies of bills and relevant contract notes issued by M/s. Sidhsilver Commodities Pvt. Ltd. in respect of transactions, copy of Audit Report, Balance Sheet and Profit & Loss Account as well as Computation of Income for the year. The ld. A.R. also supplied the copy of order sheet in respect of the Assessment Year 2014-15. 8. I have gone through the order of the ld. A.O. and the submissions made by the ld. A.R. of the assessee. There is no doubt that the copy of the Ledger Account of the broker, the bank statement, bills, Audit Report and Balance Sheet were given to the ld. A.O. On the face of the transaction, there seems to be no infirmity in the transaction. The transaction has been supported by enough evidence. 9. However, it has to be seen that whether the entries provided were accommodation entries. It is observed that the assessee had also been summoned and statement recorded. At Page Nos. 40 and 42 of the Paper Book filled, it is evident that the broker had been summoned. The note sheet entry on 30.11.2016 states as follows:- "Mr. P.K. Agarwal attends along with Mr. Sanjay Dalmia Director of Shristi Ispat & Alloys Ltd. - Mr. Sankar Lal Agarwal is said to be presently out of stn. Mr. Neera Jain also attends today & filed a letter claiming no relation with Sidhsilver Commodities P. Ltd. The A.R. files a submission dt. 30/11/ 16 in which he states that the assessee co. had no nexus with Neeraj Jain who is alleged to be an entry operator for Sidhsilver Commodities P & L account. Mr. Neeraj Jain and Mr. Sanjay Dalmia who are present here agrees. Universal Commodity Exchange is closed on action of SEBI, as on date." In other words, there was no nexus between the broker and the assessee. 10. No adverse inference can be drawn from the order sheet entry. In fact, the order sheet entry helps the assessee in his case. 11. I have vetted the decision of Calcutta High Court in CIT vs. Bhagwati Prasad Agarwal in ITA No. 22 of 2019. It, inter alia, states as follows:- “It is submitted by Mr. Prithu Dudharia, learned advocate for the revenue that the records from the Calcutta Stock Exchange shows that the name of the assessee is not appearing in respect of the transactions-in-question. The tribunal found that the chain of transaction entered into by the assessee have been proved, accounted for, documented and supported by evidence. The assessee produced before the Commissioner of Income Tax (Appeal) the contract notes, details of his DEMAT account and, also, produced documents showing that all payments were received by the assessee through bank. We do not, therefore, think that this appeal involves any substantial question of law requiring interference by this court under section 260A of the Income Tax Act, 1961. The appeal is, therefore, summarily dismissed." 12. My attention is further drawn to the decision of the Hon'ble I.T.A.T. in D.C.I.T., Circle-3(1), Kolkata vs. M/s. Atibir Hi-Tech Pvt. Ltd. in ITA No. 1747/Kol/2017. From Para Nos. 8 to 15, the following has been the decision: I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 9 "8. In the computation of total income filed along with its return of income, the assessee-company had declared commodity profit of Rs.10,00,33,775/- received from Subh Commodities Pvt. Ltd. under the head "Profits and Gains of business or profession". The enquiry made by the A.O. revealed that the claim of the assessee of having earned the commodity profit was not genuine. He accordingly treated the amount of commodity profit credited by the company in its books of account as unexplained cash credit u/s 68. This change in the head of income by the A.O. resulted in a substantial loss under the head "profits and Gains of business or profession". The A.O. however did not allow the set off of the said loss against the income assessed u/s 68 by relying on the decision of Hon'ble Kerala High Court in the case of M/s. Kerala Sponge Iron Ltd. vs. CIT. 9. In the appeal filed before the Ld. CIT(A), the assessee challenged the action of the A.O. in not allowing the set off of business loss against the income assessed u/s 68 and after considering the submissions made by the assessee as well as the material available on record, the Ld. CIT/A) allowed the claim of the assessee for the following reasons given in paragraph no. 4.3.3 of his impugned order: "In respect of Ground No. 3 and 4, the assessee has argued that even if the income shown by the assessee is assessed u/s 68, the assessee is eligible for the set off u/s 71 of the I.T. Act. I have carefully examined the legal position standing in respect of this issue before 01.04.2017. Only by amendment in the Finance Act, 2016, Section 115BBE does not allow set off of income assessed as cash credit u/s 68 against the loss under any other head as per the provisions of section 71. The legislature in all its wisdom has decided not to allow set off of loss under any provisions of this Act w.ef. 01.04.2017 in computing the income as per the provisions of Sec. 115BBE. This amendment by itself clarifies the legislative intent that for the year under consideration set off of loss under any other head except under the head "Capital Gain" is allowable from the assessed u/s 69." 10. The ld. DR strongly supported the order passed by the A.O. on this issue and submitted that the decision of the Tribunal rendered in the case of Shri Pradeep Kumar Todi vs ITO vide its order dated 22.09.2017 passed in ITA No. 984/Kol/2017 fully supports the case of the Revenue on this issue. 11. The ld. counsel for the assessee, on the other hand, submitted that the issue involved in the case of Kerala Sponge Iron Ltd. (supra) relied upon by the A.O. in the assessment order as well as in the case of Shri Pradeep Kumar Todi (supra) cited by the learned DR in support of the Revenue's case was relating to the set off of brought forward business losses against the income assessed u/s 68 as unexplained cash credit. He contended that the issue involved in the present case however is different in as much as it relates to the claim of the assessee for set off of business loss of current year against the income assessed u/s 68. He has contended that this issue as involved in the assessee's case is squarely covered in favour of the assessee by the following judicial pronouncements: I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 10 "1. 1TO vs. Prism Share Trading Put. Ltd. (ITA No. 5650/M/17) dtd. 30.11.2018. 2. DCIT vs Atha Mines Put. Ltd. (ITA No. 601/Kolkata/ 14) dtd. 05.04.2017. 3. Pr. CIT vs Atha Mines Put. Ltd. (1TA No. 158 of 2018) (Cal HC). 4. Pitamber Commodity Futures Put. Ltd. vs. ACIT (ITA No. 8634/JP/17) dtd. 21.03.18. 5. ACIT vs Sai Bhaskar Irons Put. Ltd. (ITA No. 108/Viz/ 16) dtd. 13.02.18." 12. We have considered the rival submissions and also perused the relevant material available on record. As rightly contended by the ld. counsel for the assessee, the issue involved in the case of Kerala Sponge Iron Ltd. (supra) relied upon by the A.O. of his order and in the case of Shri Pradeep Kumar Todi (supra) cited by the learned DR at the time of hearing before the Tribunal was different in as much as claim was made in the said cases for set off of brought forward business losses of the earlier years against the income assessed u/s 68 for the current year whereas the issue involved in the present case is relating to the claim of the assessee for set off of business loss of the current year against the income assessee u/s 68 in the same year. It is observed that this issue as involved in the asessee's case is squarely covered in favour of the assessee by the various judicial pronouncements cited by the learned counsel for the assessee. In one of such decisions rendered in the case of ITO vs M/s. Prism Share Trading Put. Ltd. vide order dated 30.11.2018 passed in ITA No. 5650/M/2017, the Mumbai Bench of this Tribunal has decided the similar issue vide paragraph No. 10 which reads as under: "We shall now advert to the observation of the CIT(A) that the loss suffered by the transactions could be 'set off against the income of Rs.5,73, 96,307/- assessed by the A.O. under sec. 68 of the Act. We find that Sec. 115BBE was brought on the statute by the Finance Act, 2012 with effect from 01.04.2013. On a perusal of the said statutory provision, as was then so available on the statute and was applicable to the case of the assessee for the year under consideration i.e. A. Y. 2013-14, no restriction was placed as regards 'set off of losses against the income referred to in Sec. 68, 69, 69A, 69B, 69C and 69D. Rather, the legislature in all its wisdom by amending Sec. 115BBE vide Finance Act, 2016 w.e.f 01.04.2017 had only w.e.f. A. Y. 2017-18 placèd a restriction on 'set off of losses, in addition to raising of any claim of expenditure and allowance against such income The fact that the aforesaid amendment of Sec. 115BBE by the Finance Act, 2016, w.ef. 01.04.2017 is prospective in nature can safely be gathered from a perusal of the CBDT Circular No. 3/2017, dated 20.01.201 7. In the backdrop of our aforesaid observations, it can safely be gathered that there was no embargo to claim 'set off of losses in the year under consideration ie. A. Y. 2013-14. We thus in terms of our aforesaid observations are persuaded to subscribe to the view taken by the CIT(A) that the loss suffered by the assessee from F&%O transactions could be 'set off against the income of Rs.5,73,96,307/- that was allegedly assessed by the A.O. under Sec. 68 of the Act. The Ground of appeal No. 2 raised by the revenue is dismissed." I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 11 13. As the issue involved in the present case as well as all the material facts relevant thereto are similar to that of M/ s. Prism Share Trading Put. Ltd., we respectfully follow the decision rendered by the Tribunal in the said case and uphold the impugned order of the Ld. CIT[A) allowing the claim of the assessee for set off of loss under the head "Profits and Gains of business or profession" against the income assessed u/s 68. Ground No. 3 of the Revenue's appeal is accordingly dismissed. 14. At the time of hearing before the Tribunal, the learned counsel for the assessee has not pressed the issue raised in the cross-objection filed by the assessee by submitting that the same has become infructuous in the light of the decision of the Tribunal on the issued raised in Ground No. 3 of the Revenue's appeal. The cross-objection filed by the assessee is accordingly dismissed as infructuous. 15. In the result, the appeal of the revenue as well as cross-objection of the assessee are dismissed." 13. In view of the aforementioned fact that I have no option but to accept that the transaction may. be considered as genuine particularly when even the share broker has stated before the ld. A.O. that there was no hanky-panky in the transaction. The evidence as produced before the A.O. has been refused to be taken into cognizance the various evidence adduced by the assessee. Accordingly, the A.O. is directed to assess the sum of Rs.2,30,75,391/- as income chargeable to tax under the head Income from Business or Profession' 14. In view of the above, Grounds of Appeal No. 2 to 6 are allowed. 15. In the result, Appeal of the Assessee is Allowed.” 9.2. Since the ld. D/R failed to controvert the contentions made by the ld. Counsel for the assessee as well as the finding of the ld. CIT(A) by placing any other binding precedent, the finding of the ld. CIT(A) is confirmed and Ground Nos. 1 & 2, raised by the revenue are dismissed. 10. As regards Ground No. 3, the undisputed fact is that there was a delay in depositing the employees’ contribution to PF & ESI of Rs.7,60,123/- I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 12 before the due date as prescribed under the relevant Acts governing PF & ESI. Recently, the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. v. Commissioner of Income-tax-1 [2022] 143 taxmann.com 178 (SC), dealing with this issue has settled down the controversy deciding in favour of the revenue holding that strict compliance with Section 36(1)(va) r.w.s. 2(24)(x) is a must to claim deduction and provisions of Section 43B of the Act cannot be applied on employees’ contribution to PF & ESI and further held that the High Court rulings favouring the assessee had not laid down the correct law and further held that the position of law stands well settled and such employees’ contribution towards PF & ESI if not deposited before the due date prescribed under the relevant Act governing PF & ESI, then in view of the provisions u/s 36(1)(va) r.w.s. 2(24)(x) of the Act, all such amounts shall be added to the income of the assessee. Therefore, respectfully following the ratio of law laid down by the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. (supra), we uphold the findings of the ld. CIT(A) in this respect and dismiss Ground No. 3 raised by the revenue. 11. In the result, appeal of the revenue is partly allowed. Order pronounced in the Court on 13 th December, 2022 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 13/12/2022 *SC SrPs I.T.A. No. 1732/Kol/2019 Assessment Year: 2014-15 M/s. Shristi Ispat & Alloys Ltd. 13 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent 3. संबंिधत आयकर आयुƅ / Concerned Pr. CIT 4. आयकर आयुƅ)अपील (/ The CIT(A)- 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडŊ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata
Other Referred Cases
DCIT, Circle-3(1), Kolkata vs. M/s. Atibir Hi-tech Pvt. Ltd., ITO vs. M/s Prism Share Trading Pvt. Ltd., DCIT vs. M/s. Atbir Hi-Tech Pvt. Ltd., M/s. Skipper Ltd. vs. DCIT, DCIT vs. M/s. Atha Mines Pvt. Ltd., Vijaya Hospitality and Resorts Ltd. v. CIT, ACE Infracity Developers (P) Ltd. v. DCIT, Sangeet Resorts vs. DCIT, Amirt Hatcheries Pvt. Ltd. vs. PCIT, PCIT vs. Aacharan Enterprises(P) Ltd., Famina Knit Fabs vs. ACIT, ACIT vs. Sanjay Bairathi Gems Ltd., Star Ply Board Ltd. vs. PCIT
Laws Referred To
Income Tax Act, 1961
1:1 Consultation on Startup Compliance
₹1
1:1 Consultation on Business Development
₹1
1:1 Consultation on Legal Requirements
₹1
Form AOC-2 - Disclosure of Related Party Transaction
Mehul₹50
Non-Compete Agreement
₹0
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