Shri Harish Kumar Buyani, Kolkata V. A.C.I.T.Circle-34, Kolkata

ITA 2547/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5903 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA JCITSRDR
• Assessee Lawyers: S L KOCHAR
• Keywords: Unexplained cash credit; Transactions in derivatives; Tangible material; Corroborative evidences
• Section: 143(3); 250; 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.2547/KOL/2019 ASSESSMENT YEAR:2010-11 SRI HARISH KUMAR BIYANI 138, CANNING STREET, DALHOUSIE, KOLKATA-001 [ PAN NO. AFJPB 4085 N ] / V/S . ACIT, CIRCLE-34, 110, SHANTI PALLY, AAYAKAR BHAWAN, POORVA, KOLKATA-700 107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.L.KOCHAR, ADVOCATE /BY RESPONDENT SHRI JAYANTA KHANRA, JCIT-SR-DR /DATE OF HEARING 05-02-2020 /DATE OF PRONOUNCEMENT 14-02-2020 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-10 KOLKATAS O RDER DATED 30.10.2019 PASSED IN CASE NO.831/CIT(A)-10/CIR-34/2010-11/2017-18/KOL , INVOLVING PROCEEDINGS U/S. 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN S HORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. LEARNED COUNSEL FOR THE ASSESSEE DOES NOT WISH TO PRESS FOR ASSESSEES FORMER SUBSTANTIVE GRIEVANCE CHALLENGING VALIDITY OF REOPE NING PROCEEDINGS. 3. NEXT COMES THE ASSESSEES SECOND SUBSTANTIVE GRI EVANCE OF CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TREATING THE ASSESSEE S LOSS OF 25,43,874/- AS NOT GENUINE SINCE INVOLVING CLIENT CODE MODIFICATION IN F&O ACC OUNT. THE CLINCHING FACT THAT EMERGES FROM THE INSTANT CASE FILE THAT THERE IS NO INDICATION IN THE LOWER AUTHORITIES ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 2 ORDERS AS TO WHETHER THAT THE ASSESSEES DEMAT ACCO UNT IN ANY WAY INVOLVED SUCH A CLIENT CODE MODIFICATION OR NOT. THIS TRIBUNALS CO -ORDINATE BENCHS ORDER IN ITA NO. 2395/KOL/2019 IN SHAGUN BUSINESS SERVICES PVT. LTD. VS. INCOME TAX O FFICER, WARD- 5(1), KOLKATA HAS DECIDED THE VERY ISSUE AGAINST THE DEPARTMENT AS UNDER:- 2. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE ASSESSEE'S SOLE SUBSTANTIVE GRIEVANCE ON MERIT; APART FROM RAISING LEGAL ISSUE OF VALIDITY OF SECTION 147 PROCEEDINGS, SEEKS TO REVERSE BOTH THE LOWER AUTHOR ITIES ACTION TREATING THE DISALLOWANCE OF LOSSES AMOUNTING TO RS.19,09,281/- TO BE BOGUS SINCE INVOLVING ALLEGED CLIENT CODE MODIFICATION MADE BY THE BROKER . THE CIT(A)'S DETAILED DISCUSSION AFFIRMING THE ASSESSING AUTHORITY'S ACTION TO THIS EFFECT READS AS UNDER:- '6. GROUND NOS. 2, 3 & 4 ARE AGAINST THE ADDITION M ADE U/S. 68 OF THE ACT BY THE AO IN THE SUM OF RS.19,09,281/- OBSERVING AS UN DER: - 'FROM THE REPLY IT APPEARS THAT THE ASSESSEE HAS IT SELF ADMITTED THAT CLIENT CODE MODIFICATION WAS OCCURRED IN ITS SHARE DEALING BUSINESS. THE DEPARTMENTAL INVESTIGATION WING FOUND OUT THAT THE ASSESSEE IS ONE OF BENEFICIARY OF CLIENT CODE MODIFICATION. SO IT I S DEAR THAT THE ASSESSEE BOOKED BOGUS LOSS OF RS.19,09,281/- UNDER THE GARB OF CLIENT CODE MODIFICATION.' 7. THE AIR APPEARING ON BEHALF OF THE APPELLANT VEH EMENTLY DISPUTED THE ADDITION MADE ON THIS PRETEXT BY THE AO. 8. I HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF THE AIR OF THE APPELLANT AND PERUSED THE RELEVANT ISSUE IN THE ASSESSMENT ORDER AS WELL AS THE MATERIALS PLACED BEFORE ME. THE AO HAS RECORDED THAT THE INVE STIGATION CARRIED OUT BY THE DIRECTORATE OF INCOME TAX (INVESTIGATION), UNIT 1 (3), AHMEDABAD REVEALED THAT NET LOSS TO THE EXTENT OF RS.19,09,28 1/- WAS ARRANGED BY THE APPELLANT THROUGH THE BROKER WHICH IS A CONTRIVED L OSS. THE AO HAS RECORDED THAT THE APPELLANT HAD FAILED TO SUBSTANTIATE ITS B ONA FIDENESS WITH PROPER EVIDENCE BY PRODUCING ANY BOOKS OF ACCOUNTS THAT TH ERE WAS NO SUCH TRANSACTION THROUGH CLIENT CODE MODULE. IT IS THE C ASE OF THE AO THAT AS THE TRANSACTION HAD BEEN MADE THROUGH THE PAN OF THE AP PELLANT, HE OUGHT TO BE WELL AWARE OF THE FACT OF TRANSACTIONS BEING CARRIE D OUT THROUGH CLIENT CODE MODIFICATION, AND OUGHT TO HAVE RAISED OBJECTIONS W ITH THE BROKER AGAINST SUCH TRANSACTION. IT IS THE AO'S CASE THAT AS THE APPELL ANT HAD FAILED TO PROVIDE ANY EVIDENCE IN THE MATTER OF RAISING ANY OBJECTIONS WI TH THE BROKER, AS WELL AS ANY CERTIFICATE FROM THE BROKER TO THE EFFECT THAT THER E WAS NO SUCH TRANSACTION IN THE NAME OF THE APPELLANT TOWARDS SHIFTING OUT PROF IT AND LOSS OF SHARE BUSINESS THROUGH CLIENT CODE MODULE. THEREFORE THE AO HAS RE CKONED THAT AS IT IS QUITE EVIDENT ON RECORD THAT DURING THE RELEVANT ASSESSME NT YEAR, THE APPELLANT HAD SHIFTED OUT PROFIT OF RS.19,09,281/- AND THEREFORE THIS AMOUNT WAS CORRECTLY ADDED BACK TO ITS TOTAL INCOME. 8.1. HAVING EXAMINED THE MATTER, I FIND THAT THE AP PELLANT HAS NOT BEEN ABLE TO BRING ANYTHING ON RECORD TO PROVE THE RATIONALE, NE ED AND JUSTIFICATION FOR CLIENT CODE MODIFICATIONS. WHILE IT MAY BE TRUE THA T SUCH CLIENT CODE ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 3 MODIFICATION MAY NOT PER SE BE ILLEGAL, IT HAS TO B E BROUGHT ON RECORD BY THE APPELLANT, AS HE IS THE BENEFICIARY THAT THE MODIFI CATIONS WERE TO BE ON AN ACCEPTABLE LEVEL, AND THE CLIENTS WERE KYC COMPLAIN T. IN SUCH MATTER, THE RELEVANT EXTRACT OF SEBI CIRCULAR DATED 06.02.2003, RELATING TO THE MODIFICATION OF CLIENT CODE IS BEING REPRODUCED HER EUNDER: - 'THE STOCK: EXCHANGES SHALL NOT NORMALLY PERMIT CHA NGES IN THE CLIENT ID AND WOULD KEEP A STRICT VIGIL ON CASES OF CLIENT CODE MODIFICATION AND WOULD IMPLEMENT A MONETARY PENALTY STRUCTURE TH AT WOULD ESCALATE WITH THE NUMBER OF SUCH INCIDENCES. BESIDES, THE EX CHANGE MAY TAKE NECESSARY ACTION AGAINST MEMBERS MAKING REPEATED CH ANGES. HOWEVER, GENUINE MISTAKES MAY BE ALLOWED TO BE RECTIFIED '. 'THUS, A CAREFUL READING OF THE ABOVE, EXTRACT SUGG ESTS THAT THE CHANGE IN CLIENT ID IS GENERALLY HOT ALLOWED EXCEPT WHERE THERE, IS SOME GENUINE MISTAKE. THE SEBI CIRCULAR ALSO MANDATES THE STOCK EXCHANGES TO KEEP STRICT VIGIL THE INSTANCES OF CLIENT CODE MODIFICATION AND IMPLEMENT ATION OF A PENALTY STRUCTURE. IN THE LIGHT OF THE READING AND SUBMISSI ON OF NSE, IT IS TO BE OBSERVED THAT THE PRACTICE ADOPTED BY NSE IS SCRUTI NY OF CLIENT CODE MODIFICATIONS ON A POST FACTO BASIS, WITH MONETARY PENALTIES IN DIRECT PROPORTION TO THE QUANTUM OF INCIDENCE IN COMPLIANC E WITH THE SEBI CIRCULAR. REGARDING THE REQUIREMENT OF NOT ALLOWING THE CHANG E IN CLIENT CODE EXCEPT FOR GENUINE MISTAKE, IT IS ALSO TO BE OBSERVED THAT THE TERM GENUINE MISTAKE ' HAS WIDE CONNOTATION. HOWEVER, ON PERUSAL OF THE SUBMIS SIONS MADE OUT BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS, IT DOES NOT EMANATE THAT THE MODIFICATIONS WERE GENUINE. FURTHER, A CAREFUL STUD Y OF THE SEEI CIRCULAR WOULD REVEAL THAT A TWO TIER PENALTY STRUCTURE HAS BEEN PROVIDED FOR. A MONETARY PENALTY HAS BEEN ENVISAGED WHEN THERE IS A N ESCALATION IN THE NUMBER OF CLIENT CODE MODIFICATIONS. HOWEVER, IN TH E CASE OF REPEATED OFFENCES, FURTHER NECESSARY ACTION HAS BEEN RECOMME NDED. THEREFORE, IN VIEW OF MATTER, I HOLD THAT THE AO WAS CORRECT IN CONCLU DING THAT IN THE PRESENT INSTANCE THERE WAS DELIBERATE SHIFTING OF PROFITS B Y THE APPELLANT IN CONNIVANCE WITH THE BROKER. THUS, THE ADDITION OF RS.19,.09,28 1/ - RESORTED TO BY THE AO ON THIS BEHALF ACCORDINGLY UPHELD, AND THE GROUND N OS. 2, 3 & 4 OF THE APPELLANT STANDS DISMISSED '. 3. LEARNED COUNSEL VEHEMENTLY CONTENDS THAT THE ID. CIT(APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE A.O'S ACTION IN T REATING THE ASSESSEE'S ABOVE STATED LOSS AS UNEXPLAINED CASH CREDIT. THE REVENUE, ON TH E OTHER HAND, HAS CHOSEN TO PLACE STRONG RELIANCE ON THE ID. CIT(APPEALS)'S FOREGOING DETAILED DISCUSSION. I NOTICE IN THESE PECULIAR FACTS AND CIRCUMSTANCES THIS TRIBUNA L'S COORDINATE BENCH IN M/S. KHAITAN TRADE HOLDINGS PVT. LIMITED -VS.- ITO IN ITA NO. 2179/KOL/2017 HAS ADJUDICATED THE VERY ISSUE AS UNDER:- '2. THE ASSESSEE IS A COMPANY AND IS A SUB-BROKER I N SHARES. THE ASSESSING OFFICER DISALLOWED THE CLAIM ON ACCOUNT OF DERIVATI VE TRANSACTIONS OF RS.8,91,057/-. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD ENTERED INTO LIMITED TRANSACTIONS AND ALL THE TRANSACTION IN WHI CH THE ASSESSEE ENTERED INTO WERE TRANSACTIONS IN WHICH CLIENT CODE MODIFICATION ( CCM ), WAS MADE BY THE BROKER, THROUGH WHOM THE TRANSACTIONS WERE AFFE CTED. HE HELD THAT THE LOSS ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 4 WHICH WERE BOOKED BY THE ASSESSEE WERE ACTUALLY INC URRED BY SOMEBODY ELSE, BUT BY CHANGING THE CODE SUBSEQUENTLY, THE BROKER T RANSFERRED THE LOSS TO THE ASSESSEE. THE ASSESSING OFFICER GAVE A LETTER TO TH E STOCK EXCHANGE FOR VERIFICATION OF THE GENUINENESS OF THE TRANSACTIONS . THE STOCK EXCHANGE HAS CONFIRMED THAT MODIFICATIONS WERE MADE IN THIS CASE . THE ASSESSEE CONTENDED THAT ALL THESE TRANSACTIONS WERE GENUINE AND THAT T HE RELEVANT CONTRACT NOTES, THE RECORD OF THE TRANSACTION WERE SUBMITTED BY THE ASSESSEE AND THAT, THE PAYMENTS FOR THE TRANSACTIONS WERE MADE THROUGH BAN KING CHANNELS AND CONFIRMATIONS ARE FURNISHED TO ESTABLISH THE GENUIN ENESS OF THE TRANSACTIONS. IT CONTENDED THAT, WHEN THE NATIONAL STOCK EXCHANGE IT SELF HAS CONFIRMED THAT THE TRANSACTIONS IN QUESTION, THE LOSS CANNOT BE DI SALLOWED. THE ASSESSING OFFICER APPLIED THE THEORY OF HUMAN PROBABILITIES A ND RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SUMATI DAY AL V. CIT (1995) 214 ITR 801 (SC) AND CIT-VS. DURGA PRASAD MORE (1971) 82 IT R 540 (SC), AND MADE THE DISALLOWANCE. 2.1. ON APPEAL THE ID. FIRST APPELLATE AUTHORITY, U PHELD THIS ORDER OF THE ASSESSING OFFICER. HE HELD THAT HUMAN ERROR CANNOT OCCUR ON ALL OCCASIONS. HE OBSERVED THAT THE DERIVATIVE TRANSACTIONS TOOK PLAC E THROUGH A BROKER BUT ON DIFFERENT DATES. HE ALSO APPLIED THE THEORY OF PROB ABILITIES AND DISMISSED THE CASE OF THE ASSESSEE. HE REJECTED THE CONTENTIONS O F THE ASSESSEE THAT ADDITION CANNOT BE MADE ON MERE SUSPICION, CONJECTURES AND S URMISES AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF MESSRS. LALCHA ND BHAGAT AMBICAL VS THE COMMISSIONER OF INCOME- TAX 37 ITR 288 SC. 3. AGGRIEVED THE ASSESSEE IS BEFORE US IN APPEAL. 4. AFTER HEARING RIVAL CONTENTIONS, I FIND THAT THE ASSESSEE HAS PROVIDED DOCUMENTARY EVIDENCE BY WAY OF CONTRACT NOTES, BANK STATEMENTS EVIDENCING CHEQUE PAYMENTS FOR ALL THESE TRANSACTIONS, PAYMENT OF SECURITY TRANSACTIONS TAX BEFORE THE ASSESSING OFFICER. THE NATIONAL STOC K EXCHANGE HAS CONFIRMED THAT THESE TRANSACTIONS HAVE TAKEN PLACE IN THE EXC HANGE AND IN THE NAME OF THE ASSESSEE. THE ISSUE THAT HAS TO BE ADJUDICATED, IS WHETHER, WHEN CCM IS DONE TO CORRECT ERRORS, IT CAN BE INFERRED THAT MANIPULA TION HAS BEEN DONE BY THE ASSESSEE. 4.1. THE KOLKATA ' A ' BENCH OF THE TRIBUNAL, IN THE CASE OF M/S.RATNABA LI COMMODITIES VS. THE INCOME TAX OFFICER, WARD-12(3), KOLKATA, IN ITA NO. 787/KOI/2013 , ASSESSMENT YEAR 2008-09, ORDER DT 30/08/2017 , WHEREIN AT PARA 5 & 6, IT HAS BEEN HELD AS FOLLOWS:- ' 5 . HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE IN HAND IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE SAID ORDER DT. 16-06-17 IN ASSESSEE 'S OWN CASE IN ITA NO. 191/KO1/2015 FOR THE A.Y 2009-10, WHEREIN THE ASSESSEE HAS CLAIMED LOSS OF RS.19, 76,538/-. THE AO TREATING TH E SAME AS BOGUS ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE ONLY ON THE GROUND THAT THE BROKER HAS MODIFIED THE NAME AND CODE OF A SSESSEE. WE FIND THAT THIS TRIBUNAL VIDE ITS SAID ORDER DT. 16-06-17 IN ASSESSEE'S OWN CASE FOR THE A. Y 2009-10 HELD THAT MODIFICATIONS ARE PE RMITTED BY NSE AND ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 5 SUCH MODIFICATION CARRIED OUT WITHIN THE PRESCRIBED TIME LIMIT PROVIDED BY NSE. RELEVANT PORTION OF FINDING OF SUCH ORDER I S REPRODUCED HEREIN BELOW:- 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD; INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED AND PLA CED RELIANCE UPON. THE ISSUE BEFORE US REVOLVES FOR THE AMOUNT O F LOSS CLAIMED BY ASSESSEE FOR - 19,76,538/- WHICH WAS TRE ATED BY THE AUTHORITIES BELOW AS BOGUS MAINLY DUE TO THE MODIFI CATION CARRIED OUT IN THE NAME AND CODE OF THE ASSESSEE BY THE BROKER. THE DIRECTOR OF THE ASSESSEE-COMPANY AND THE DIRECT OR OF THE BROKER COMPANY LISTED WITH NSE ARE SAME PERSON. THE IMPUGNED LOSS WAS TREATED AS BOGUS DUE TO SEVERAL R EASONS SUCH AS IT WAS INCURRED AT THE FAG-END OF THE YEAR, TO R EDUCE THE TAXABLE PROFIT EARNED BY ASSESSEE DURING THE YEAR A ND SIMILAR KIND OF LOSS WAS ALSO DISALLOWED IN THE IMMEDIATE P RECEDING YEAR. 7.1 FROM THE FOREGOING DISCUSSION, WE FIND THAT IND EED THE CLIENT'S CODE AND NAME WERE MODIFIED IN RESPECT OF TRANSACTIONS CLAIMED BY ASSESSEE. HOWEVER, ON PERUSAL OF RECORD, WE FIND THAT THE IMPUGNED TRANSACTIONS WERE CARRIED OUT THR OUGH BANKING CHANNEL AND ALL THE SUPPORTING EVIDENCE SUC H AS CONTRACT NOTE, PAYMENT OF STT WERE FILED AT THE TIM E OF ASSESSMENT PROCEEDINGS. WE ALSO FIND THAT LD. CIT(A ) CONFIRMED THE ORDER OF AO ON THE BASIS OF HIS GUESS -WORK AS EVIDENT FROM HIS APPELLATE ORDER WHICH IS REPRODUCE D BELOW:- ' THERE IS A POSSIBILITY THAT THE MODIFICATIONS MIGHT HAVE BEEN MADE TO ACCOMMODATE THE APPELLANT AS THE BROKER OF THE APPELLANT WAS A SISTER CONCERN. ' FURTHER THE ID. CIT -A HAS OBSERVED IN HIS ORDER AS UNDER:- 'EVEN THOUGH APPARENTLY IT HAS NOT BEEN ESTABLISHED THAT THE SUCH MODIFICATION HAD BEEN DONE IN VIOLATION OF RUL ES AND REGULATIONS PRESCRIBED BY SEBI AND THE AO HAD PROCE EDED ON SUSPICION, HOWEVER AT THE SAME TIME IT ALSO CANNOT BE CONCLUDED EITHER THE LOSS WOULD NOT BE ATTRIBUTABLE 10 THESE ' MODIFICATIONS '. ON PERUSAL OF THE ORDER; WE FIND THAT LD. CIT(A) HA S CONFIRMED THE ORDER OF AO ON HIS OWN SURMISE AND CONJECTURE W HICH IS NOT PERMISSIBLE IN THE EYES OF LAW. LD. DR HAS ALSO NOT - BROUGHT ANYTHING ON RECORD CONTRARY TO THE ADVANCE ARGUMENT S PLACED BY LD. AR FOR THE ASSESSEE AS WELL AS NO DEFECTS OF WHATSOEVER HAS BEEN POINTED OUT IN THE DOCUMENTS PRODUCED BY A SSESSEE IN SUPPORT OF ITS IMPUGNED LOSS. WE ALSO FIND WHATEVER MODIFICATIONS WERE CARRIED OUT BY THE BROKER THEY W ERE CARRIED ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 6 OUT WITHIN THE TIME PERMITTED BY THE NSE FOR THE PU RPOSE OF MODIFICATION. THUS, WE ARE OF THE VIEW THAT THE ORD ER OF AUTHORITIES BELOW IS BASED ON SURMISE AND CONJECTUR E AND SAME IS NOT BASED ON TANGIBLE MATERIAL TO TREAT THE IMPU GNED LOSS AS BOGUS LOSS. 7.2 MOREOVER, WE ALSO FIND THAT THE DETAILS FURNISHED BY THE ASSESSEE IN RESPECT OF TRANSACTIONS GIVING RISE TO THE LOSS WERE EXACTLY MATCHING WITH THE DETAILS FURNISHED BY THE NSE. IN NONE OF THE CASE, AUTHORITIES BELOW HAVE BROUGHT ON RECORD WHERE ANY MISMATCH IS FOUND BETWEEN THE BOOKS OF TH E ASSESSEE AND THE CONFIRMATION RECEIVED FROM NSE. HAD THERE B EEN ANY MANIPULATION IN THE IMPUGNED LOSS THEN IT COULD HAV E BEEN REVEALED FROM THE CONFIRMATION RECEIVED FROM NSE. T HEREFORE, THE MODIFICATIONS IN THE CLIENT'S NAME AND CODE CAN NOT JUSTIFY THE IMPUGNED LOSS AS BOGUS. THUS, WE CONCLUDE THAT THE IMPUGNED ADDITION HAS BEEN MADE BY THE AUTHORITIES BELOW ON THE BASIS OF SURMISE AND CONJECTURE WHICH IS NOT PE RMISSIBLE IN THE EYES OF LAW AS HELD BY THE HON'BLE SUPREME COUR T IN THE CASE OF LALCHAND BHAGAT AMBICA RAM VS. CIT BIHAR AN D ORISSA (1959) 159 ITR 289 (SC). THEREFORE, WE HOLD THAT THE IMPUGNED LOSS CANNOT BE SUBJECT- MATTER OF ADDITION ON THE BASIS OF SUSPICION. IN THIS REGARD WE ALSO RELY IN THE CASE OF CIT VS. KUNDAN INVESTMENT LTD. REPORTED IN 263 ITR 626 (CAL) WHERE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD:- 'THE TRIBUNAL HAD FOUND THAT ALL RELEVANT DOCUMENTS RELATING TO CONTRACT NOTES, BILLS, THE QUOTED PRICE AND OTHER MATERIALS WERE PRODUCED THE TRANSACTIONS WERE MADE THROUGH CHEQUES. ALL THE SHARES RELATED TO THE REPUTED COMPANIES AND WERE QUOTED SHARES IN THE STO CK EXCHANGES AND WERE PURCHASED AND SOLD AT THE PREVAL ENT QUOTED MARKET RATES, WHICH WAS VERIFIED FROM THE STATEMENT OF THE SLACK EXCHANGES. ON THESE BASIS, T HE TRIBUNAL FOUND THAT THE CIT(A) HAD PROCEEDED ON THE BASIS OF SUSPICION THAT THERE MIGHT BE SOME INGENUI NITY IN THE TRANSACTIONS. ON THE BASIS OF THE MATERIALS PRODUCED, THE TRIBUNAL CAME TO A FINDING OF FACT, W HICH DOES NOT SEEM TO BE PERVERSE. WHETHER THE SHARES CO ULD BE SOLD IMMEDIATELY ON THE DATE OF PURCHASE OR NOT WAS A QUESTION OF BUSINESS EXPEDIENCE. WHETHER THE DECI SION WAS CORRECT OR WRONG CANNOT THE QUESTION, WHICH CAN BE A SUBJECT-MATTER OF DECISION IN SUCH A CASE. IN ORD ER TO FIND OUT WHETHER THE TRANSACTION IS GENUINE OR IN G ENUINE IT IS NEITHER THE EXPEDIENCE NOR CORRECTNESS OF THE DECISION NOR THE BUSINESS EXPERTISE OF THE PERSON T O BE CONSIDERED. IT IS TO BE CONSIDERED ON THE BASIS OF THE MATERIALS THAT THERE WAS NO SUCH TRANSACTION AND TH AT THESE SHARE TRANSACTIONS WERE PAPER TRANSACTIONS. T HE SUFFERING OF LOSS COULD NOT BE A FACTOR FOR SUCH PU RPOSE. ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 7 HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VIEW TAKEN BY THE TRIBUNAL ALLOWING SHARE LOSS CANNOT BE SAID TO BE ERRONEOUS OR PERVERSE CIT VS. EMERALD COMMERCIAL LTD & ANR (2001) 171 CTR (CAL) 193: (2001) 250 ITR 539 (CAN. CIT- VS. DHAWAN INVESTMENT & TRADING CO. LTD (1999) 238 ITR 486 (CAN AND CIT VS. CURRENCY INVESTMENT CO. LTD (2000) 158 CTR (CAL) 361: (2000) 241 ITR 494 ( CAL ) RELIED ON. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE IMPUGNED LOSS CLAIMED BY ASSESSEE IS GENUINE LOSS I N THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND THEREFORE ELIGIBLE FOR DEDUCTION. ACCORDINGLY, AD I S DIRECTED. THIS GROUND OF ASSESSEE'S APPEAL IS ALLOWED .' 6. IN VIEW OF ABOVE, WE FIND THAT THE CIT-A WAS NOT JUSTIFIED IN CONFIRMING THE IMPUGNED ADDITION / DISALLOWANCES OF LOSS ON ACCOUNT TRANSACTIONS IN DERIVATIVES TO THE EXTENT OF RS. 5, 46,885/-. ACCORDINGLY, THE SAME IS LIABLE TO BE DELETED. THE GROUND RAISED BY THE ASSESSEE IS ALLOWED . 5. RESPECTFULLY FOLLOWING THE PROPOSITIONS OF LAW L AID DOWN BY THE COORDINATE BENCH OF THE TRIBUNAL, AND IN VIEW OF THE EVIDENCE ON RECORD, I DELETED THIS DISALLOWANCE AND ALLOW THIS APPEAL OF THE ASSESSEE' . 4. I ADOPT THE ABOVE EXTRACTED DETAILED REASONING M UTATIS MUTANDIS TO HOLD THAT THE IMPUGNED UNEXPLAINED CASH CREDIT ADDITION IS NOT SU STAINABLE IN THE FACTS OF THE PRESENT CASE. THE SAME IS DIRECTED TO BE DELETED . I ADOPT THE ABOVE EXTRACT DETAILED REASONING MUTATIS MUTANDIS AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION IN QUESTION OF 25,43,874/-. NECESSARY COMPUTATION TO FOLLOW AS PER LAW. 3. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN OPEN COURT ON 14/02/2020 SD/- (S.S. GODARA) JUD ICIAL MEMBER KOLKATA, *DKP/SR.PS - 14/02/2020 ITA NO.2547/KOL/2019 A.Y.2010-11 SH. HARISH KR. BIYANI VS. ACIT, CIR-34 K OL PA GE 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SRI HARISH KR. BIYANI 138, CANNING ST. D ALHOUSIE, KOLKATA-001 2. /RESPONDENT-ACIT. CIR-34, 110, SHANTI PALLY, AAYAKA R BHAWAN, KOLKATA- 107 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ ',