ACIT, Central Circle - 3(4) , Kolkata V. M/s. PKC Commodities (P) Ltd., , Kolkata

ITA 2632/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0793 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Income from undisclosed sources; Question of law; Condonation of delay
• Section: 143(3); 13; 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T. VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.2632/KOL/2018 ( S / ASSESSMENT YEAR: 2011-12) ACIT, CC-3(4), KOLKATA VS. M/S PKC COMMODITIES (P) LTD. 1, R.N. MUKHERJEE RD, MARTIN BURN HOUSE, 3 RD FLOOR, KOLKATA- 700001 ./ ./ PAN/GIR NO. :AABCR 5112 J (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SUPRIYO PAL, JCIT RESPONDENT BY :SHRI MIRAJ D SHAH, A.R. / DATE OF HEARING : 06/02/2020 /DATE OF PRONOUNCEMENT : 10/06/2020 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTA INING TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-21, KOLKATA, IN APPEAL NO. 10211/DCIT,CC-3 (4)/CIT(A)-21/KOL/2017- 18, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 147 / 143(3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) DATED 16/10/2017. 2. THE APPEAL FILED BY THE REVENUE IS BARRED BY LIM ITATION BY 13 DAYS.THE REVENUE FILED A PETITION FOR CONDONATION OF DELAY R EQUESTING THE BENCH TO CONDONE THE DELAY. LD DR FOR THE REVENUE EXPLAINED THE REAS ONS FOR DELAY STATING THAT THERE WAS WORK PRESSURE DUE TO TIME BARRING CASES, THEREFORE APPEAL COULD NOT FILE ON TIME. WE HAVE HEARD BOTH THE PARTIES ON THIS PRE LIMINARY ISSUE AND HAVING M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 2 REGARD TO THE REASONS GIVEN IN THE PETITION FOR CON DONATION OF DELAY WE CONDONE THE DELAY AND ADMIT THE APPEAL OF THE REVENUE FOR H EARING. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT (A) IGNORED THE FACTS THAT THE ASSESSEE FAILED TO PRODU CE ANY EVIDENCE TO PROVE THAT ENTITY OF M/S. JKT TRADING WAS GENUINE AND HAD REAL BUSINESS AND TRANSACTIONS CONDUCTED WERE REAL IN NATURE. 2. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IGNORED THE FACTS THAT SUMMONS ISSUED TO PROPRI ETOR M/S. JKT TRADING, SRI RAMESH SHARMA WAS RETURN BACK UNSERVED BY THE P OSTAL DEPARTMENT AND THE DIRECTOR OF THE ASSESSEE SRI PAWAN KUMAR KA YAN WHO ALSO ADMITTED THAT THE ASSESSEE IS UNABLE TO PRODUCE THE PROPRIETOR OF M/S. JKT TRADING. 3. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN HOLDING THAT THE SUM OF RS. 2,70,05,00 0/- RECEIVED FROM M/S. JKT TRADING DID NOT CONSTITUTE THE ASSESSEES UNEXP LAINED INCOME U/S 68 OF THE IT ACT AS THE ASSESSEE FAILED TO DISCHARGE I TS PRIMARY OBLIGATION BY PROVIDING THE IDENTITY AND CREDITWORTHINESS OF SUCH PERSON AND GENUINENESS OF TRANSACTION. 4. THAT THE REVENUE RESERVES ITS RIGHTS TO SUBSTANT IATE, MODIFY, DELETE, SUPPLEMENT AND / OR ALTER THE GROUNDS AT THE TIME O F HEARING . 4. BRIEF FACTS QUA THE ISSUE, AS STATED IN THE ASSE SSMENT ORDER, ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF STOCK BROKING , SECURITIES TRADING AND FINANCE. THE ASSESSEE COMPANY FILED ITS RETURN OF I NCOME FOR THE A.Y. 2011-12 ON 12.04.2017, DISCLOSING TOTAL INCOME OF RS. 3652/-, WHICH WAS PROCESSED BY CPC ON 06.01.2012 BY DETERMINING A DEMAND OF RS. 3652/- . LATER ON, THE ASSESSEE`S CASE WAS REOPENED UNDER SECTION 147 OF THE ACT AFTE R OBTAINING NECESSARY STATUTORY APPROVAL AND A NOTICE U/S 148 WAS ISSUED AND DULY SERVED ON THE ASSESSEE COMPANY ON 30.03.2017. IN COMPLIANCE TO TH E SAID NOTICE, THE ASSESSEE HAD E-FILED ITS RETURN OF INCOME ON 12.04.2017 DISC LOSING TOTAL INCOME OF RS.3652/-. THE ASSESSEE FURTHER REQUESTED TO PROVID E THE REASONS RECORDED FOR ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT, WH ICH WAS DULY PROVIDED TO IT ON 13/04/2017. M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 3 THE ASSESSING OFFICER RECEIVED INFORMATION REGARDIN G THE ASSESSEE COMPANY FROM DDIT (INV.), UNIT-3(3), KOLKATA ON 15/03/2017 WHERE IN IT WAS STATED THAT THE ASSESSEE COMPANY WAS ONE OF THE BENEFICIARIES FROM M/S RUPAM TRADERS PVT. LTD., THE PROPRIETORSHIP CONCERN OF SHRI RAJESH SIN HA. M/S. RUPAM TRADERS WAS HOLDING AN ACCOUNT IN ING VYSYA BANK LTD., KANKURGA CHI BRANCH, KOLKATA (A/C NO. 5960111006788) AND IN THE SAID ACCOUNT, IT WAS FOUND THAT FOR THE PERIOD IN FINANCIAL YEAR 2009-10 AND FROM THE PERIOD APRIL TO DECEMBER, 2010, AGGREGATE TURNOVER IN THE ACCOUNT WERE RS. 15.32 CRORE AND RS . 20.18 CRORE RESPECTIVELY. THE AVERAGE BALANCE MAINTAINED IN THE ACCOUNT FOR T HE ABOVE PERIOD WAS RS. 0.96 LAC AND RS. 2.05 LACS RESPECTIVELY. IN THE SAID ACC OUNT FUNDS WERE RECEIVED BY TRANSFER FROM OTHER FIRMS AND FROM CLEARING AS WELL . 5.ON PERUSAL OF THE BANK STATEMENT OF M/S RUPAM TRA DERS, IT WAS NOTICED BY AO THAT THE ACCOUNT WAS OPENED ON 25.06.2009 AND CLOSE D ON 17.01.2011. IT WAS ALSO FOUND THAT MAXIMUM FUNDS FROM THE ACCOUNTS HAVE BEE N TRANSFERRED TO SEVERAL ENTITIES NAMELY PIONEER TRADING AND J.K.T TRADING. DURING THE F.Y. 2010-11, PIONEER TRADING CO. HAD RECEIVED RS.16,90,000/- AND J.K.T. TRADING HAD RECEIVED RS. 46,55,055/- FROM M/S RUPAM TRADERS. FURTHER, ON ANALYZING THE BANK STATEMENT OF J.K.T. TRADING HAVING ACCOUNT NUMBER 5 96011003690 WITH KOTAK MAHINDRA BANK LTD., IT WAS FOUND THAT DURING THE F. Y. 2010- 11, AN AMOUNT OF RS.2,57,26,126/- HAS BEEN TRANSFERRED TO M/S PKC CO MMODITIES PVT. LTD. ACCORDINGLY, DURING THE COURSE OF ASSESSMENT PROCEE DINGS TO VERIFY THE IDENTITY, GENUINENESS & CREDITWORTHINESS OF SUCH TRANSACTIONS SUMMONS U/S 131 OF THE I.T ACT, 1961 WERE ISSUED TO THE PROPRIETOR OF M/S JKT TRADING, SHRI RAMESH SHARMA ON 17/08/2017, BUT THERE WAS NO COMPLIANCE OF THE SAID SUMMONS. THE AO NOTICED THAT ASSESSEE HAS RECEIVED AMOUNT(CR EDITS) IN ITS BANK ACCOUNT NO. 00080340017167 MAINTAINED WITH HDFC BANK, STE PHEN HOUSE BRANCH, KOLKATA FROM M/S JKT TRADING IN THE FOLLOWING MANNE R: M/S PKC COMMODITIES (P) LTD. ASSESSMENT YEAR: 4 M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR: 2011-12 THE ABOVE MENTIONED DETAIL CONTAINED IN THE ASSESSM ENT ORDER 7.T HE LD. AO HAS SET OUT THE DETAILS OF SERIES OF TRAN SACTIONS CONDUCTED BETWEEN VARIOUS CONCERNS THROUGH WHICH THE MONEY, WHICH JKT PAID TO THE A TRACED. WITH REFERENCE TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF KOLKATA, THE LD. AO HAS CLAIMED THAT THE CERTAIN MO NIES WAS DEPOSITED IN THE ING VYSYA BANK A/C O THE COFFERS OF M/S JKT, WHICH IN TURN WAS PAID TO T HE M/S PKC COMMODITIES (P) LTD. ASSESSMENT YEAR: 5 THE ABOVE MENTIONED DETAIL CONTAINED IN THE ASSESSM ENT ORDER HE LD. AO HAS SET OUT THE DETAILS OF SERIES OF TRAN SACTIONS CONDUCTED BETWEEN VARIOUS CONCERNS THROUGH WHICH THE MONEY, WHICH JKT PAID TO THE A TRACED. WITH REFERENCE TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF KOLKATA, THE LD. AO HAS CLAIMED THAT THE CERTAIN MO NIES WAS DEPOSITED IN THE ING VYSYA BANK A/C O F M/S RUPAM TRADERS PVT LTD WHICH ULTIMATELY REACHE D THE COFFERS OF M/S JKT, WHICH IN TURN WAS PAID TO T HE ASSESSEE M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR: 2011-12 THE ABOVE MENTIONED DETAIL CONTAINED IN THE ASSESSM ENT ORDER ON PAGES 4 TO HE LD. AO HAS SET OUT THE DETAILS OF SERIES OF TRAN SACTIONS CONDUCTED BETWEEN VARIOUS CONCERNS THROUGH WHICH THE MONEY, WHICH JKT PAID TO THE A SSESSEE WAS TRACED. WITH REFERENCE TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF KOLKATA, THE LD. AO HAS CLAIMED THAT THE CERTAIN MO NIES WAS DEPOSITED IN THE F M/S RUPAM TRADERS PVT LTD WHICH ULTIMATELY REACHE D ASSESSEE COMPANY. M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 6 6. THE AO NOTED THAT IT IS THE DUTY OF THE ASSESSEE TO PROVE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE MONEY RECEI VED FROM THE PROPRIETOR OF JKT TRADING.SECTION-68 PERMITS THE ASSESSING OFFICE R MAY MAKE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE ABOUT THE CREDIT APPEA RING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, IF THE ASSESSEE OFFERS NO EXPLANATION REGARDING THE NATURE AND SOURCE OF CREDIT OR THE EXPLANATION OFFERED IS NOT SATISFA CTORY.IT PLACES NO DUTY UPON AO TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS REC EIVED BY THE ASSESSEE. IN THE INSTANT CASE, NO FURTHER DETAILS EXCEPT VERY PRIMAR Y DOCUMENTS HAVE BEEN FURNISHED BY THE ASSESSEE. THE VERIFICATION OF THE CREDITS INTRODUCED DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR COUL D NOT BE VERIFIED DUE TO NON- COMPLIANCE TO THE SUMMONS U/S 131 OF THE ACT, 1961 BY BOTH THE CREDITORS AND THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTS, THE ASSESSING OFFICERWAS OF THE VIEW THAT IT IS PRUDENT AND LOGICAL TO TREAT THE ENTIRE AMOUNT OF RS.2,70,05,000/- CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE RE CEIVED FROM M/S JKT TRADING AS UNEXPLAINED AMOUNT, HENCE AO MADE ADDITION OF TH E WHOLE AMOUNT OF RS.2,70,05,000/- TO THE TOTAL INCOME OF THE ASSESSE E FOR THE A.Y. 2011-12. 7. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER.AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 8. THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERA TED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OU R EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON T HE OTHER HAND THE LD COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD. CIT (A). 9. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THR OUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIAL AVAILABLE ON RECORD. WE N OTE THAT ACCORDING TO SECTION 68 OF THE INCOME TAX ACT, WHERE ANY SUM IS FOUND CR EDITED IN THE BOOKS OF AN M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 7 ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT SATISFACTORY IN THE OPINION OF THE ASSESSING OFFICE R, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT ASSESSMENT YEAR. THE ASSESSING OFFICER MAY CONSIDER SUCH SUM AS CASH CRE DIT DUE TO LACK OF SUFFICIENT EXPLANATION.IT IS WELL KNOWN THAT PROVISIONS OF SEC TION 68 HAVE BEEN INTRODUCED INTO THE TAXING ENACTMENTS STEP BY STEP IN ORDER TO PLUG LOOPHOLES. EVEN LONG PRIOR TO THE INTRODUCTION OF SECTION 68 OF THE ACT, IN THE STATUTE BOOK, COURTS HAD HELD THAT WHERE ANY AMOUNTS WERE FOUND CREDITED IN THE BOOKS OF THE ASSESSEE IN THE PREVIOUS YEAR AND THE ASSESSEE OFFERED NO EXPLA NATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED WAS, IN T HE OPINION OF THE ASSESSING OFFICER, IS NOT SATISFACTORY, THE SUMS SO CREDITED COULD BE CHARGED TO INCOME-TAX AS INCOME OF THE ASSESSEE OF THE RELEVANT ASSESSMENT Y EAR. 10. WE NOTE THAT WITH EFFECT FROM ASSESSMENT YEAR 2 013-14, SECTION 68 OF THE INCOME TAX ACT HAS BEEN AMENDED TO PROVIDE THAT IF A CLOSELY HELD COMPANY FAILS TO EXPLAIN THE SOURCE OF SHARE CAPITAL, SHARE PREMI UM OR SHARE APPLICATION MONEY RECEIVED BY IT TO THE SATISFACTION OF THE ASSESSING OFFICER, THE SAME SHALL BE DEEMED TO BE THE INCOME OF THE COMPANY UNDER SECTIO N 68 OF THE ACT. WE NOTE THAT IN ASSESSEE`S CASE THE ISSUE DOES NOT PERTAIN TO SHARE CAPITAL/SHARE PREMIUM. THE CASE OF THE ASSESSEE COMPANY IS THAT THE ASSESS EE COMPANY RECEIVED AMOUNT OF RS.2,70,05,000/- FROM THE PROPRIETOR OF M/S JKT TRADING, SHRI RAMESH SHARMA. AS PER ASSESSMENT ORDER, THE ASSESSEE COMPA NY HAS FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE A MOUNT RECEIVED FROM THE PROPRIETOR OF M/S JKT TRADING, (SHRI RAMESH SHARMA) , THEREFORE AO MADE ADDITION TO THE TUNE OF RS.2,70,05,000/-. HON`BLE BOMBAY HIGH COURT IN THE CASE OF GAGANDEEP INFRASTRUCTURE, 80 TAXMANN. COM 272, DATED MARCH 20 , 2017, DECLARES T HAT AMENDMENT TO SECTION 68 IS PROSPECTIVE IN NATURE AND APPLICABLE ONLY FR OM A.Y. 2013-14.WE ALSO MAKE IT CLEAR THAT AMENDED PROVISIONS OF SECTION 68 DOES NOT APPLY TO THE ASSESSEE COMPANY UNDER CONSIDERATION, AS THE ASSESSMENT YEAR INVOLVED IS A.Y. 2011-12 M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 8 THEREFORE THE ASSESSEE COMPANY NEED NOT TO PROVE SO URCE OF THE SOURCE IN RESPECT OF AMOUNT RECEIVED FROM PROPRIETOR OF M/S JKT TRADI NG, (SHRI RAMESH SHARMA). WITH THIS BACKGROUND, NOW WE SHALL PROCEED TO EXAMI NE IN THE ASSESSEE`S CASE UNDER CONSIDERATION, WHETHER ASSESSEE COMPANY HAS D ISCHARGED HIS ONUS TOPROVE, PRIMA FACIE, THE IDENTITY, CREDITWORTHINESS AND GEN UINENESS OF THE AMOUNT RECEIVED FROM THE PROPRIETOR OF M/S JKT TRADING, (S HRI RAMESH SHARMA) TO THE TUNE OF RS.2,70,05,000/-. WE NOTE THAT BEFORE LD CIT(A) THE ASSESSEE SUBMITTE D THE FOLLOWING DOCUMENTS: (I).THE KYC OF DISPUTED CLIENT-DEPOSITORS OF JKT TR ADING, (II).LEDGER AND SAMPLE CONTRACT NOTES FOR TRADE BY JKT TRADING, (III) LEDGER OF NMCE REFLECTING DEALS BY JKT TRADIN G, (IV)STATEMENT SHOWING RECEIVABLES AND PAYABLES IN F OR FUTURE AND OPTION, (V)BANK STATEMENT SHOWING DEPOSIT MADE BY JKT TRADI NG, (VI) NMCE RULE DEPOSITING CLIENT MONEY IN SEPARATE BANK ACCOUNT. LEARNED COUNSEL, MR. MIRAJ D. SHAH, POINTED OUT THA T BY SUBMITTING THESE PLETHORA DOCUMENTS, THE ASSESSEE COMPANY HAVE PROVE D THE THREE INGREDIENTS OF SECTION 68, NAME IDENTITY, CREDITWORTHINESS AND GEN UINENESS OF THE CREDITOR JKT TRADING. APART FROM THIS, LD COUNSEL POINTED OUT TH AT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF STOCK BROKING THEREFORE ITS ROLE IS LIKE A MIDDLE MAN, THE MONEY IS COMING FROM JKT TRADING AND ASSESSEE I S A TRUSTEE OF THAT MONEY, THAT IS, THE SUM OF RS. 2,70,05,000/- IS NOT THE AS SESSEE`S MONEY, THEREFORE NONE OF THE INGREDIENTS OF SECTION 68 IS APPLICABLE TO T HE ASSESSEE, HENCE ADDITION UNDER SECTION 68 OF THE ACT DOES NOT ARISE. WE NOTE THAT IN THE PRESENT CASE IT IS AN ADMITTED FACT THE ASSESSEE COMPANY WAS REGISTERED M EMBER OF MCX-SX & NMCE, WHICH ARE ALL RECOGNIZED STOCK EXCHANGES ACTI VELY INVOLVED IN TRADING OF COMMODITIES AND SECURITIES IN INDIA. EACH OF THESE EXCHANGE FUNCTIONS IN ACCORDANCE WITH THEIR RULES & REGULATIONS WHICH ARE FRAMED IN CONFORMITY WITH THE DIRECTIONS AND REGULATIONS FRAMED BY SEBI. ANY MEMBER OF PUBLIC WHO IS DESIROUS OF CONDUCTING ANY TRANSACTIONS ON THE PLAT FORM OF THESE EXCHANGES HAS TO NECESSARILY CONDUCT THE TRANSACTIONS THROUGH THE RE GISTERED MEMBERS WHO ACT AS BROKERS FOR SUCH TRANSACTIONS. THE CONDUCT OF THE M EMBERS OF THESE EXCHANGES IN M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 9 THEIR CAPACITY AS BROKERS IS STRICTLY REGULATED BY THE EXCHANGES AND NO COMMODITY BROKER IS PERMITTED TO CONDUCT THE STOCK BROKING AC TIVITY IN CONTRAVENTION OF THESE RULES. 11.WE NOTE THAT THE ASSESSEE COMPANY HAD ENTERED IN TO AN AGREEMENT DATED 20.11.2008 WITH M/S JKT IN TERMS OF WHICH BOTH THES E ENTITIES HAD AGREED TO CONDUCT ITS COMMODITY MARKET TRANSACTIONS BY ENGAGI NG THE ASSESSEE COMPANY AS ITS BROKER. FROM COPY OF THE AGREEMENT IT APPEARED THAT M/S JKT HAD FURNISHED ALL THE DOCUMENTARY EVIDENCES TO COMPLY WITH STRICT KYC NORMS PRESCRIBED BY SEBI. SUBSEQUENT TO REGISTRATION OF THE AGREEMENT, M/S JKT REGULARLY CONDUCTED TRANSACTIONS IN CAPITAL MARKETS, BOTH CASH AND DERI VATIVE SEGMENTS OF VARIOUS EXCHANGES I.E. MCX-SX & NMCE. M/S JKT HAD OBLIGATIO N TO MAINTAIN WITH ITS BROKER THE ADEQUATE MARGINS PRESCRIBED BY MCX-SX & NMCE FROM TIME TO TIME. THE IMPUGNED SUM OF RS.2,70,05,000/- WAS RECE IVED BY THE ASSESSEE COMPANY FROM M/S JKT ON SEVERAL DATES AS SET OUT IN PAGES 5 TO 7 OF THE ASSESSMENT ORDER. THE AMOUNT RECEIVED FROM M/S JKT WERE TOWARDS THE OPEN SAUDAS ON THE MCX-SX PLATFORM AS NOTED BY LD CIT(A) . THE SUMS PAID BY M/S JKT WAS TOWARDS THE APPLICABLE MARGIN REQUIREMENTS AS PER THE EXCHANGE REGULATIONS. THE DOCUMENTS AND EVIDENCES MENTIONED ABOVE THEREFORE SHOWS THAT RS.2,70,05,000/- WHICH THE ASSESSEE RECEIVED FROM M /S JKT IS NOT IN NATURE OF 'LOAN' OR 'ADVANCE' WHICH THE ASSESSEE COULD HAVE U SED FOR ITS OWN USE OR PURPOSE. IN RESPECT OF TRANSACTIONS CONDUCTED WITH M/S JKT I N RELATION TO THE MARGIN MONIES WHICH WAS DEPOSITED WITH THE EXCHANGE, THE A SSESSEE COMPANY HAD DERIVED BROKERAGE INCOME AND THE SAME WAS OFFERED T O TAX FOR AY 2011-12. THE ASSESSEE COMPANY SUBMITTED THESE DOCUMENTS & EVIDEN CES BEFORE AO SUBSTANTIATING THE FACT THAT M/S JKT WAS A REGULAR CLIENT OF THE ASSESSEE COMPANY ANDTHE LD. AO DID NOT POINT OUT ANY FACTUAL INFIRMI TY OR FALSITY EITHER IN THE EXPLANATIONS OR THE DOCUMENTS. 12. BASED ON THE ABOVE FACTS, DOCUMENTS/EVIDENCES A ND EXPLANATIONS, THE LD CIT(A) HAS RIGHTLY DELETED THE ADDITION OBSERVING T HE FOLLOWINGS: M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 10 1. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND PERUSED THE ASSESSMENT ORDER. IN THE IMPUGNED ORDER THE LD. AO HAS ASSESSED RS.2,70,05,000 /- RECEIVED BY THE APPELLANT FROM M/S JKT TRADING ('JK T') UNDER SECTION 68 OF THE ACT. FROM THE PERUSAL OF THE IMPU GNED ORDER I FIND THAT ON PAGES 2 TO 7 OF THE SAID ORDER, THE LD. AO HAS SET OUT THE DETAILS OF SERIES OF TRANSACTIONS CONDUCTED BETWEEN VARIOUS CONCERNS THR OUGH WHICH THE MONEY, WHICH JKT PAID TO THE APPELLANT WAS TRACED. WITH RE FERENCE TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF KOLKATA, TH E LD. AO HAS CLAIMED THAT THE CERTAIN MONIES WAS DEPOSITED IN THE ING VYSYA BANK A/C OF M/S RUPAM TRADERS PVT LTD WHICH ULTIMATELY REACHED THE COFFERS OF M/S JKT, WHICH IN TURN WAS PAID TO THE APPELLANT COMPANY. WITH REFERENCE TO SUCH IN FORMATION, THE LD. AO REACHED THE CONCLUSION THAT THE MONEY AGGREGATING R S.2,70,05,000/- ORIGINATED FROM THE ACCOUNT OF M/S RUPAM TRADERS PVT LTD REPRE SENTED UNACCOUNTED INCOME OF THE APPELLANT WHICH WAS INTRODUCED IN THE ASSESSEE'S BOOKS IN THE NAME OF M/S JKT. THE LD. AO HAS FURTHER CLAIMED THA T IN ORDER TO VERIFY THE EXPLANATIONS PUT FORTH BY THE APPELLANT, SUMMONS U/ S 131 WAS ISSUED TO M/S JKT BUT SINCE THERE WAS NO RESPONSE OR COMPLIANCE TO TH E NOTICE U/S 131, HE WAS UNABLE TO DETERMINE CREDITWORTHINESS AND IDENTITY O F M/S JKT AS WELL AS HE COULD NOT VERIFY THE GENUINENESS OF THE TRANSACTION LEADI NG HIM TO CONCLUDE THAT RS.2,70,05,000/- RECEIVED BY THE APPELLANT FROM JKT WAS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 2. ON CONSIDERATION OF THE SUBMISSIONS OF THE LD. A R AND THE OBSERVATIONS MADE BY THE LD. AO IN THE IMPUGNED ORDER, I HOWEVER FIND THAT THE INFORMATION, WHICH THE LD. AO BROUGHT ON RECORD, CERTAINLY RAISED QUES TIONS ABOUT THE GENUINENESS OF THE AMOUNTS RECEIVED FROM M/S JKT WHICH REQUIRED DEEPER INVESTIGATION. HOWEVER THE CONCLUSIONS, WHICH THE LD. AO ULTIMATEL Y DREW, DO NOT APPEAR TO BE BASED ON OBJECTIVE CONSIDERATION OF THE FACTS, MATE RIALS AND EVIDENCES BROUGHT ON RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FA CT THE APPELLANT WAS REGISTERED MEMBER OF MCX-SX & NMCE, WHICH ARE ALL RECOGNIZED S TOCK EXCHANGES ACTIVELY INVOLVED IN TRADING OF COMMODITIES & SECUR ITIES IN INDIA. EACH OF THESE EXCHANGES FUNCTIONS IN ACCORDANCE WITH THEIR RULES & REGULATIONS WHICH ARE FRAMED IN CONFORMITY WITH THE DIRECTIONS AND REGULA TIONS FRAMED BY SEBI. ANY MEMBER OF PUBLIC WHO IS DESIROUS OF CONDUCTING ANY TRANSACTIONS ON THE PLATFORM OF THESE EXCHANGES HAS TO NECESSARILY CONDUCT THE T RANSACTIONS THROUGH THE REGISTERED MEMBERS WHO ACT AS BROKERS FOR SUCH TRAN SACTIONS. THE CONDUCT OF THE MEMBERS OF THESE EXCHANGES IN THEIR CAPACITY AS BRO KERS IS STRICTLY REGULATED BY THE EXCHANGES AND NO COMMODITY BROKER IS PERMITTED TO CONDUCT THE STOCK BROKING ACTIVITY IN CONTRAVENTION OF THESE RULES. A NY CONTRAVENTION BY THE COMMODITY BROKER IN CARRYING OUT HIS OBLIGATIONS AS BROKER RESULTS IN IMPOSITION OF FINES & PENALTIES AND IN SOME CASES RESULTS IN S USPENSION OF LICENSE. 3. I FIND THAT DURING THE RELEVANT YEAR THE APPELLA NT HAD REPORTED SUBSTANTIAL INCOME BY WAY OF BROKERAGE, WHICH THE APPELLANT HAD DERIVED FOR CARRYING OUT TRANSACTIONS ON BEHALF OF ITS SEVERAL CLIENTS ON DI FFERENT EXCHANGES. ONE OF THE SEVERAL CLIENTS ON WHOSE BEHALF THE APPELLANT CONDU CTED TRADING IN DERIVATIVES WAS M/S JKT. IN ACCORDANCE WITH REGULATIONS FORMULA TED BY SEBI, THE APPELLANT HAD ENTERED INTO AN AGREEMENT DATED 20.11.2008 WITH M/S JKT IN TERMS OF WHICH BOTH THESE ENTITIES HAD AGREED TO CONDUCT ITS COMMO DITY MARKET TRANSACTIONS BY ENGAGING THE APPELLANT AS ITS BROKER. FROM COPY OF THE AGREEMENT IT APPEARED M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 11 THAT M/S JKT HAD FURNISHED ALL THE DOCUMENTARY EVID ENCES TO COMPLY WITH STRICT KYC NORMS PRESCRIBED BY SEBI. SUBSEQUENT TO REGISTR ATION OF THE AGREEMENT, M/S JKT REGULARLY CONDUCTED TRANSACTIONS IN CAPITAL MARKETS, BOTH CASH & DERIVATIVE SEGMENTS OF VARIOUS EXCHANGES I.E. MCX-S X & NMCE. I FURTHER FIND THAT BEING REGULAR ENGAGED IN DERIVATIVE TRADING, M /S JKT HAD OBLIGATION TO MAINTAIN WITH ITS BROKER THE ADEQUATE MARGINS PRESC RIBED BY MCX-SX & NMCE FROM TIME TO TIME. IN THE COURSE OF APPELLATE PROCE EDINGS THE LD. AR PLACED BEFORE ME THE MCX-SX & NMCE REGULATIONS REQUIRING T HE BROKERS TO COLLECT MARGIN DEPOSITS FROM CLIENTS BEFORE SECURITY TRADIN G CONDUCTED ON THEIR BEHALF. FROM THESE REGULATIONS, IT WAS EVIDENT THAT BEFORE THE BROKER CARRIED OUT TRANSACTIONS ON BEHALF OF THEIR CLIENTS IN DERIVATI VE SEGMENTS, THE BROKERS WERE REQUIRED TO OBTAIN MARGINS EITHER IN THE FORM OF MO NETARY FUNDS OR IN THE FORM OF BANK GUARANTEES OR IN THE FORM OF COLLATERAL SECURI TIES WHICH COULD BE DEPOSITED WITH THE EXCHANGE. THE COLLECTION & MAINTENANCE OF ADEQUATE MARGINS WITH THE EXCHANGE WAS THE PRE-REQUISITE WHICH EVERY STOCK BR OKER HAD TO SCRUPULOUSLY MAINTAIN BEFORE TRANSACTIONS WERE CONDUCTED ON THE FLOOR OF EXCHANGE ON BEHALF OF THE CLIENTS. IT ALSO APPEARED FROM THE REGULATIO NS FRAMED BY THE EXCHANGES THAT EACH MEMBER WAS REQUIRED TO REPORT ON DAILY BA SIS THE EXPOSURE WHICH EACH CLIENT HAD IN RESPECT OF OPEN POSITIONS IN DERIVATI VE SEGMENT AND ALSO TO PROVIDE THE DETAILS OF MARGIN MONEY OR MARGIN SECURITIES OB TAINED FROM THE CLIENTS AND PROVIDED TO THE EXCHANGE TO COVER THE OPEN EXPOSURE OF THE SAID CLIENT. 4. WITH REFERENCE TO THESE REGULATIONS, THE LD. AR OF THE APPELLANT POINTED OUT THAT THE IMPUGNED SUM OF RS.2,70,05,000/- WAS RECEI VED BY THE APPELLANT FROM M/S JKT ON SEVERAL DATES AS SET OUT IN PAGES 5 TO 7 OF THE ASSESSMENT ORDER. DRAWING ATTENTION TO THE -REPORTS FURNISHED BY THE ASSESSEE BEFORE THE MCX-SX FOR THE YEAR, THE LD. AR SUBMITTED THAT SUMS RECEIV ED FROM M/S JKT WERE TOWARDS THE OPEN SAUDAS ON THE MCX-SX PLATFORM. THE LD. AR DREW MY ATTENTION TO THE APPLICABLE MARGIN REPORTS AND SUBM ITTED THAT THE SUMS PAID BY M/S JKT WAS TOWARDS THE APPLICABLE MARGIN REQUIREME NTS AS PER THE EXCHANGE REGULATIONS. IN ORDER TO MEET THE EXCHANGE REQUIREM ENTS FOR MAINTAINING MARGIN IT WAS OBLIGATORY ON M/S JKT'S PART TO PROVIDE REQU ISITE FUNDS TO THE APPELLANT SO AS TO COMPLY WITH THE TRADING REGULATIONS WITHOUT A TTRACTING PENAL CONSEQUENCES. ACCORDINGLY M/S JKT & M/S PTC TO MEE T ITS MARGIN OBLIGATIONS HAD PAID NET SUM AGGREGATING TO RS.2,70,50,000/- ON SEVERAL DATES. IT IS FURTHER NOTED ON RECEIPT OF THESE MARGIN DEPOSITS, THE APPE LLANT HAD REPORTED THE COMPLIANCE THEREOF TO THE EXCHANGE. THE CONTEMPORAN EOUS DOCUMENTS THEREFORE SHOWS THAT RS.2.70.05.000/- WHICH THE APPELLANT REC EIVED FROM M/S JKT WAS NOT IN NATURE OF 'LOAN' OR 'ADVANCE' WHICH THE APPELLAN T COULD HAVE USED FOR ITS 'OWN USE OR PURPOSE. IT IS EVIDENT FROM THE TRANSACTIONA L DOCUMENTS THAT THE AGGREGATE PAYMENTS OF RS.2,70,05,000/- WAS MADE BY M/S JKT TO MEET THEIR RESPECTIVE CONTRACTUAL OBLIGATIONS OF MAINTAINING MARGIN DEPOS IT WITH THE EXCHANGES AGAINST THEIR OWN PROPRIETARY EXPOSURE IN THE MCX-S X. I ALSO FIND THAT THE EXCHANGE REGULATIONS SPECIFICALLY PROVIDED THAT THE MONIES COLLECTED BY THE APPELLANT IN ITS CAPACITY AS MEMBER-BROKER OF THE E XCHANGE, WAS PROHIBITED FROM USING THE CLIENT FUNDS FOR ITS OWN USE AND AT ALL TIMES THE APPELLANT WAS PRECLUDED FROM UTILIZING THE CLIENT FUNDS FOR ITS O WN PURPOSES OR MIX THE SAID FUNDS WITH ITS OWN FUNDS. I THEREFORE FIND FULL FOR CE IN THE LD. AR'S SUBMISSIONS THAT THE MONEY, WHICH THE APPELLANT RECEIVED FROM M /S JKT TOTALLING RS.2,70,05,000/-, WAS IN DISCHARGE OF ITS CONTRACTU AL OBLIGATIONS AND TO COMPLY M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 12 WITH THE STOCK EXCHANGE REGULATIONS. I FIND THAT TH E NECESSARY TRANSACTIONAL DOCUMENTS & EVIDENCES SUBSTANTIATING THE FACT THAT M/S JKT WAS A REGULAR CLIENT OF THE APPELLANT AND THAT THE MONIES WERE DEPOSITED IN DISCHARGE OF THEIR MARGIN MONEY OBLIGATIONS WERE FURNISHED BEFORE THE LD. AO. ALTHOUGH THESE TRANSACTIONAL DOCUMENTS WERE FURNISHED, THE LD. AO DID NOT POINT OUT OR PROVE ANY FACTUAL INFIRMITY OR FALSITY EITHER IN THE EXPL ANATIONS OR THE DOCUMENTS. THE STOCK EXCHANGE REGULATIONS REQUIRING THE BROKER & C LIENTS TO MAINTAIN MARGIN MONEY ARE AVAILABLE IN THE PUBLIC DOMAIN AND THE EX CHANGES PUBLICLY DISPLAY THE MARGIN REQUIREMENTS FROM TIME TO TIME AND AS SUCH T HE INFORMATION WHICH THE APPELLANT HAD FURNISHED BEFORE THE AO WAS VERIFIABL E FROM THE DATA WHICH WAS REGULARLY PUBLISHED BY THE EXCHANGE AUTHORITIES AND AVAILABLE IN PUBLIC DOMAIN. IF THE LD. AO HAD RESOURCES AT HIS DISPOSAL TO TRAC E THE TRAIL OF MONEY, THEN IT WAS EQUALLY POSSIBLE FOR THE LD. AO TO VERIFY THE A PPELLANT'S EXPLANATIONS WITH REGARD TO MAINTENANCE OF MARGIN MONEY. BE THE SAME AS IT MAY, FIND THAT THE MONEY WHICH THE APPELLANT RECEIVED FROM M/S JKT WAS ENTIRELY UTILIZED ONLY FOR THE MEETING THEIR RESPECTIVE OBLIGATIONS TOWARDS TH E EXCHANGE FOR MARGIN MONEY REQUIREMENTS. SAVING & EXCEPT FOR MEETING THE MARGI N MONEY REQUIREMENTS, THE MONEY WAS NOT AVAILABLE WITH THE APPELLANT FOR ITS OWN USE. IN THE CIRCUMSTANCES THEREFORE THE PREMISE OF THE LD. AO THAT THE UNACCO UNTED MONIES OF THE APPELLANT WERE INTRODUCED IN THE FORM OF ADVANCE RECEIVED FRO M M/S JKT CANNOT BE ACCEPTED AS IT IS DEVOID OF LOGIC OR ECONOMIC RATIO NALE. 5. I FURTHER FIND THAT IN RESPECT OF TRANSACTIONS C ONDUCTED WITH M/S JKT IN RELATION TO THE MARGIN MONIES WHICH WAS DEPOSITED W ITH THE EXCHANGE, THE APPELLANT HAD DERIVED BROKERAGE INCOME AND THE SAME WAS OFFERED TO TAX FOR AY 2011-12. IN THE IMPUGNED ORDER THE AO HAS NOT DISBE LIEVED NOR QUESTIONED THE GENUINENESS OF THE TRANSACTIONS EXECUTED BY THE APP ELLANT IN ITS CAPACITY AS A BROKER OF M/S JKT OR THE BROKERAGE INCOME DERIVED T HEREFROM. IF THE LD. AO DID NOT DISPUTE OR DISBELIEVE THE GENUINENESS OF THE DE RIVATIVE TRANSACTIONS WHICH THE APPELLANT CONDUCTED ON MCX-SX ON BEHALF OF M/S JKT AND BROKERAGE INCOME DERIVED FROM THE SAID TRANSACTION WAS ALSO ASSESSED WITHOUT QUESTION THEN IT WAS NOT OPEN FOR THE LD. AO TO QUESTION THE GENUINENESS OF THE MARGIN DEPOSIT WHICH WAS PROVIDEDBY M/S JKT FOR CARRYING OUT THE SAID F& O TRANSACTIONS. BUT FOR MEETING THE REQUIREMENT OF MAINTAINING REQUISITE MA RGIN MONEY, M/S JKT COULD NOT HAVE LEGALLY CARRIED OUT THE CORRESPONDING TRAN SACTIONS, WHICH YIELDED THE BROKERAGE INCOME TO THE APPELLANT. SINCE IN THE IMP UGNED ORDER THE LD. AO DID NOT QUESTION THE GENUINENESS OR BONAFIDES OF M/S JK T'S TRANSACTIONS CARRIED OUT BY THE APPELLANT ON THE EXCHANGES, THEN IT WAS NOT OPEN FOR THE LD. AO TO ONLY DISBELIEVE THE GENUINENESS OF THE AMOUNTS PAID BY M /S JKT TO MEET ITS MARGIN MONEY REQUIREMENTS. I ALSO NOTE THAT THE LD. AO HAS NEVER DISPUTED OR DISBELIEVED THE FACT THAT THE IMPUGNED SUM OF RS.2, 70,05,000/- WAS PAID TO THE APPELLANT BY M/S JKT THROUGH PROPER BANKING CHANNEL AND NO EVIDENCE WAS BROUGHT ON RECORD WHICH SHOWED THAT PRIOR TO ISSUE OF THE CHEQUES IN APPELLANT'S FAVOUR ANY CASH WAS DEPOSITED IN THE ACCOUNT OF M/S JKT. 6. IN THE IMPUGNED ORDER THE LD. AO HAS ALSO NOT MU CH EMPHASIS ON THE FACT THAT IN RESPONSE TO SUMMONS U/S 131 OF THE ACT, THE PROP RIETORS OF M/S JKT DID NOT PERSONALLY APPEAR BEFORE HIM WHICH NECESSITATED THE LD. AO TO DRAW ADVERSE INFERENCE AGAINST THE APPELLANT. IN THE FIRST INSTA NCE, THE STAND TAKEN BY THE LD. AO IS FOUND TO BE CONTRARY TO THE JUDGMENT OF THE H ON'BLE SUPREME COURT IN THE M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 13 CASE OF CIT VS ORISSA CORPORATION LTD (159 ITR 78) WHEREIN THE HON'BLE COURT HELD AS FOLLOWS: 'IN THIS CASE THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE T HAT THE SAID CREDITORS WERE THE INCOME-TAX ASSESSEES. THEIR INDEX NUMBER WAS IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER SECTION 1 31 AT THE INSTANCE OF THE ASSESSEE, DID NOT PURSUE THE MATTER FURTHER. THE RE VENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO F IND OUT WHETHER THEY WERE CREDIT-WORTHY OR WERE SUCH WHO COULD ADVANCE THE AL LEGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITO RS. IN THOSE CIRCUMSTANCES, THE ASSESSEE COULD NOT DO ANY FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAD DISCHARGED THE BUR DEN THAT LAY ON HIM, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREAS ONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH COULD ARISE.' 7. I ALSO NOTE THAT IN THE PRESENT CASE THE TRANSAC TION BETWEEN THE APPELLANT & M/S JKT WAS NOT FINANCIAL TRANSACTIONS IN TRUE SENS E. IT MAY BE TRUE THAT THE APPELLANT RECEIVED SUMS OF MONIES THROUGH BANKING C HANNEL THROUGH M/S JKT BUT THESE MONIES WERE NEVER RECEIVED NOR THEY WERE INTENDED FOR THE PERSONAL BENEFIT OR USE BY THE APPELLANT. 8. IN TERMS OF STOCK EXCHANGE REGULATIONS, THE MONE Y RECEIVED BY APPELLANT FROM M/S JKT IN ITS CAPACITY AS CLIENT OF THE APPELLANT PRECLUDED THE APPELLANT FROM HAVING ACCESS TO THE SAID MONEY FOR ITS PERSONAL US E OR BENEFIT. IN THE CIRCUMSTANCES THE CRITERIA EMBEDDED IN SECTION 68 C OULD NOT BE BLINDLY INVOKED OR APPLIED BY THE LD. AO MERELY BECAUSE THE APPELLA NT HAD RECEIVED CERTAIN SUMS FROM M/S JKT. BEFORE CONSIDERING THE ISSUE OF TAXABILITY FROM THE PERSPECTIVE OF SECTION 68, IT WAS IMPERATIVE FOR TH E LD. AO TO EXAMINE THE TOTALITY OF THE FACTS &CIRCUMSTANCES SURROUNDING TH E RECEIPT OF MONIES FROM M/S JKT. THE LD. AO SHOULD NOT HAVE BEEN SWAYED BY THE MERE FACT THAT CERTAIN SUMS OF MONIES WERE PAID BY M/S JKT, ORIGIN OF WHICH WAS CONSIDERED DUBIOUS BY THE LD. AO. FOR THE PURPOSE OF ASSESSING SUCH RECEIPT I N THE HANDS OF THE APPELLANT AS ITS UNEXPLAINED INCOME, THE LD. AO OUGHT TO HAVE TAKEN INTO CONSIDERATION THE FACT THAT THE APPELLANT DID NOT HAVE ACCESS TO THE SAID SUM AT ANY POINT IN TIME AND THIS FACT WAS PROVED BY THE APPELLANT BY FURNIS HING COPY OF THE CLIENT MARGIN MONEY REPORTS WITH THE EXCHANGE. 9. FOR THE REASONS SET OUT IN THE FOREGOING, I FIND FORCE IN THE APPELLANT'S SUBMISSIONS THAT THE SUM OF RS.2,70,05,000/- RECEIV ED FROM M/S JKT DID NOT CONSTITUTE THE APPELLANT'S UNEXPLAINED INCOME CHARG EABLE TO TAX U/S 68 OF THE ACT. THE LD. AO IS ACCORDINGLY DIRECTED TO DELETE THE IM PUGNED ADDITION. 13. WE HAVE GONE THROUGH THE ORDER OF LD CIT(A), AS NOTED ABOVE, AND DO NOT FIND AND INFIRMITY IN THE ORDER OF LD CIT(A). THAT BEING SO, WE DECLINE TO INTERFERE WITH THE ORDER OF ID. CIT(A) IN DELETING THE AFORES AID ADDITION. HIS ORDER ON THIS M/S PKC COMMODITIES (P) LTD. ITA NO.2632/KOL/2018 ASSESSMENT YEAR:2011-12 14 ADDITION IS, THEREFORE, UPHELD AND THE GROUNDS OF A PPEAL OF THE REVENUE ARE DISMISSED. 14.BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BE ING PRONOUNCED AFTER 90 DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO- ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F DCIT VS. JCB LIMITED IN ITA NO. 6264/MUM/2018 AND ITA NO. 6103/MUM/2018 FOR A.Y. 2013-14 ORDER DATED 14.05.2020. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 10.06.2020 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 10/06/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ACIT, CC-3(4), KOLKATA 2. M/S PKC COMMODITIES (P) LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES