M/s. Shardaraj Tradefin Ltd., , Kolkata V. ITO, Ward - 1(3), Kolkata , Kolkata

ITA 236/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5700 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 13-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMARA
• Keywords: Transactions in derivatives; Earning of tax free income
• Section: 143(3); 14A; 2

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 236 / KOL / 20 18 ASSESSMENT YEAR :2011-12 M/S SHARDARAJ TRADEFIN LTD., 1, CROOKED LANE, 1 ST FLOOR, ROOM NO.109, KOLKATA-69 [ PAN NO.AAECS 8217 J ] V/S . INCOME TAX OFFICER, WARD-1(3), AAYAKAR BHAWAN,A P-7, CHOWRINGHEE SQUARE, KOLKATAS-69 /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI SAURABH KUMARA, ADDL. CIT-DR /DATE OF HEARING 17-01-2019 /DATE OF PRONOUNCEMENT 31-01-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-19 KOLKATAS O RDER DATED 29.11.2017 PASSED IN CASE NO.154/CIT(A)-19/KOL/2015-16, INVOLV ING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. CASE CALLED TWICE. NONE APPEARS AT ASSESSEE BEHEST. THE REGISTRY HAS ALREADY SENT AN RPAD NOTICE DATED 13.12.2018 FOR TO DAYS HEARING. IT IS ACCORDINGLY PROCEEDED EX PARTE. WE TAKE UP THE INST ANT APPEAL ON MERITS. 2. THE ASSESSEES FORMER SUBSTANTIVE GROUND SEEKS T O REVIVE BOTH THE LOWER AUTHORITIES ACTION DISALLOWING ITS LOSS OF ,1,30,10,266/- CLAIMED ON TRADING LOSS IN F&OS TRANSACTIONS TO BE LACKING GE NUINENESS. IT TRANSPIRES DURING THE COURSE OF HEARING THAT RELEVANT CONTRACT NOTES COMING FROM M/S ITA NO.236/KOL/2018 A.Y.2011- 12 M/S SHARDARJ TRADEFIN LTD. VS. ITO WD-1(3) KOL. PAGE 2 NKB SECURITIES WERE UNSIGNED WITHOUT HAVING EVEN CO NTRACT NOTES STAMP. IT FURTHER EMERGED THAT THE IMPUGNED ENTIRE LOSS AMOUN T INCURRED DURING THE FINANCIAL YEAR WAS SHOWN AS OUTSTANDING IN THE NAME OF M/S NKB SECURITIES UNDER THE HEAD SUNDRY CREDITS. THE ASSESSING OFFI CER FOUND MANY DISCREPANCIES IN ASSESSEES EXPLANATION THAT THE LE DGER WAS UNSIGNED THERE WAS NO PAYMENT OR RECEIVABLES, THERE WAS NO MARGIN MONEY PAID AND THAT THERE WERE MERE JOURNAL ENTRIES IN THE LEDGER. THE ASSESSING OFFICER HAD NECESSARY CORRESPONDENCE WITH M/S NKB SECURITIES AS WELL AS NATIONAL STOCK EXCHANGE INDIA LTD. TO CONCLUDE THAT THE ASSESSEES LOSS CLAIM WAS A BOGUS ONE. HE ACCORDINGLY ADDED BACK THE IMPUGNED SUM AS AFFIRMED DURING THE COURSE OF LOWER APPELLATE PROCEEDINGS. THE ABOVE CL INCHING FINDING OF FACTS HAVE GONE UNREBUTTED DURING THE COURSE OF HEARING B EFORE US AS WELL. THERE IS NO MATERIAL IN THE CASE FILE WHICH WOULD SUGGESTS T HAT THE ASSESSEES F&O TRANSACTIONS THROUGH M/S NKB SECURITIES ARE GENUINE . WE THUS DECLINE ASSESSEES FORMER SUBSTANTIVE GROUND ON THIS COUNT ALONE. 3. NEXT COMES ASSESSEES LATTER SUBSTANTIVE GROUND SEEKING TO DELETE SEC. 14A R.W.S. RULE 8D DISALLOWANCE OF 5,17,858/-. SUFFICE TO SAY, IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE ASSESSEE HAD NOT DERIVED ANY EXEMPT INCOME IN THE RELEVANT PREVIOUS YEAR. HON'BLE JURIS DICTIONAL HIGH COURTS DECISION IN CIT VS. M/S ASHIKA GLOBAL SECURITIES LTD. ITAT 100 OF 2014 GA NO.2122 OF 2014 DECIDED ON 11.06.2018 HOLDS THAT SECTION 14A R.WS. 8D RULE DISALLOWANCE PROVISION DOES NOT APPLY IN ABSENCE OF ANY EXEMPT INCOME DERIVED IN THE RELEVANT PREVIOUS YEAR. WE THEREFORE ACCEPT ASSESSEES LATTER SUBSTANTIVE GROUND. 4. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 31 /01/2019 SD/- SD/- ( %) (' %) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 31 / 01 /201 9 ITA NO.236/KOL/2018 A.Y.2011- 12 M/S SHARDARJ TRADEFIN LTD. VS. ITO WD-1(3) KOL. PAGE 3 / COPY OF ORDER FORWARDED TO:- 1 . /APPELLANT-M/S SHARDARJ TRADEFN LTD. 1, CROOKED LAN E, 1 ST FL. R.NO.109, KOL-69 2 . /RESPONDENT-ITO WD-1(3), AAYAKAR BHAWAN, P-7, CHOWR INGHEE SQ. KOLKATA-69 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5 . 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 3,