Smt. Bharat Malhotra, New Delhi V. ITO, New Delhi

ITA 3062/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3873 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Opportunity of being heard; Additional evidence
• Section: 133(6); 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SHRI N.K. SAINI , ACCOUNTANT MEMBER I.T.A. NO. 3062 /DEL /201 7 ASSESSMENT YEAR: 2010 - 11 BHARAT MALHOTRA C/O, SANDEEP SAPRA ADVOCATE, C - 763, NEW FRIENDS COLONY NEW DELHI PAN - AGJPM1127F VS. ITO WARD - 41(5 ) NEW DELHI [APPELLANT] [RESPONDENT] APPELLANT BY: SH. SANDEEP SAPRA, ADVOCATE RESPONDENT BY: SH. ATIQ AHMED, SR. DR DATE OF HEARING: 30 11 2017 DATE OF PRONOUNCEMENT: 30 01 2018 O R D E R N.K. SAINI , A.M: THIS IS AN APP EAL BY THE ASSESSEE AGAINST THE ORDER DATED 20.3.2017 OF THE CIT(A) - 14 , NEW DELHI . FOLLOWING GROUNDS HA VE BEEN RAISED IN THIS APPEAL: - I . THAT THE PROVISIONS OF SECTION 147/148 I.T. ACT ARE NOT APPLICABLE TO THE FACTS OF APPELLANT S CASE AND THEREFORE THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE QUASHED / ANNULLED. II . THAT THE LD. CIT(A) HAS ERRED ON FACTS AND UNDER THE LAW IN SUSTAINING THE ADDITION OF RS. 5,66,023/ - (7,17,400 MINUS 1,51,377) ON ACCOUNT OF PROFIT DERIVED FROM TRADING THROUGH MULTI COMMODITY EXCHANGE. AT ANY RATE, THE ADDITION AS SUSTAINED IS VERY EXCESSIVE. III . WITHOUT PREJUDICE TO ABOVE GROUNDS, THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE SET ASIDE TO THE FILE OF THE AO BECAUSE THE ASSESSEE WAS UNABLE TO PRODUCE SH. RAMAN KUMAR GROVER EITHER ITA NO. 3062 /DEL/201 7 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, APPELLATE PROCEEDINGS OR DURING THE REMAND PROCEEDINGS BEFORE THE AO AS HE WAS BEHIND THE BARS. IV . THAT THE LEVY OF INTEREST U/S 234 OF I.T. ACT IS ARBITRARY, UNJUST, ILLEGAL AND AT ANY RATE, VERY EXCESSIVE. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE SUST ENANCE OF ADDITION OF RS. 5,66,023/ - OUT OF THE ADDITIONS MADE BY THE AO ON AC COUNT OF TRADING THROUGH MULTI C OMMODITY E XCHANGE. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO REOPENED THE CASE OF THE ASSESSEE BY ISSUING A NOTICE U/S 147 DATED 31.12.2013 . IN RESPONSE THE ASSESSEE FILED THE RETURN OF INCOME ON 9.2.2015 DECLARING AN INCOME OF RS. 1,21,821/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A O CALLED THE INFORMATION U/S 133 (6) OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS THE ACT ) FROM THE MULTI C OMMODITY E XCHANGE (MCX) MUMBAI. IN RESPONSE TO WHICH THE MCX SUPPLIED THE INFORMATION VIDE LETTER DATED 4.3.2015 , GIST OF WHICH WAS AS UNDER: - DATE MTM VALUE (+VE= PROFIT; - VE = LOSS 26.06.2009 6000 27.06.2009 17000 04.08.2009 - 17000 05.08.2009 45000 07.01.2010 - 17730 08.01.2010 8380 11.01.2010 4750 28.01.2010 - 25650 29.01.2010 7800 30.01.2010 - 4830 ITA NO. 3062 /DEL/201 7 3 01.02.2010 227040 02.02.2010 94710 04.02.2010 371930 TOTAL 7,17,400 3. ON THE BASIS OF THE AFORESAID INFORMATION, THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD MADE AN OVERALL PROFIT AT RS. 7,17,400/ - . HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE SAID PROFIT SHOULD NOT BE TREATED AS INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON. IN RESPONSE, THE ASSESSEE SUBMITTED THAT A COMMISSION OF RS. 1,51,377/ - AS REPORTED BY MULTI COMMODITY E XCHANGE OF INDIA LIMITED WAS RECEIVED AND CLAIMED THAT SHE HAD NOT ENTERED INTO ANY TRANSACTION OR SIGNED ANY SALE OR PURCHASE AGREEMENT FOR THE BAL ANCE AMOUNT OF RS. 5,26,023/ - . IT WAS ALSO SUBMITTED THAT SHE DID NOT UNDERSTAND AS TO HOW AND ON WHAT BASIS THIS PROFIT OF RS. 7,17,400/ - WAS ARRIVED AT. THE AO, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND MADE THE ADDITIONS OF RS. 7,17,400/ - BY OBSERVING IN PARA 4.3 OF THE ASSESSMENT ORDER DATED 24.3.2015 AS UNDER: - 4.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND HAVE ALSO GONE THROUGH THE REPORT RECEIVED FROM MULTI COMMODITY EXCHANGE WHEREIN THE NAME OF THE ASSESSEE IS CLEARLY WRITTEN INDICATING THE CLIENT ID NO, DLA1001 AGAINST THE NAME OF THE ASSESSEE. INFORMATION CALLED U/S 133(6) CONTAINS DETAILED INFORMATION SUCH AS TRADE NO. TRADE DATE, TIME, SYMBOL, BUY AND SALE, TRADE PRICED, TRADED VALUE, CLIENT ID. THE OVERALL RESULT OF TRANSACTIONS ADJUSTING LOSS AND PROFIT FROM DIFFERENT TRANSACTIONS IS PROF I T OF RS. 7,17,400/ - .UNDER THESE CIRCUMSTANCES, THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE DID NOT UNDERSTAND AS TO ON WHAT BASIS THE PROFIT OF RS. 717400/ - HAS BEEN ARRIVED AT, IS NOT MAINTAINABLE. IN THE AIR FILED IN THE CASE OF ASSESSEE, THE TRANSACTION TOTALING TO RS. 11,18,09,195/ - ARE ALSO REFLECTED IN THE NAME OF THE ASSESSEE WHEREIN HER PAN IS ALSO QUOTED. THE ASSESSEE HAS ALSO NOT DENIED THAT SHE HAS DONE TRA DING THROUGH MULTI COMMODITY EXCHANGE. IT IS ANOTHER THING SHE MI GHT HAVE AUTHORIZED SOMEBODY TO TRADE IN HER NAME. BUT, ULTIMATELY PROFIT AND LOSS IN THAT CASE - ALSO ACCRUES TO THE ASSESSEE. ACCORDINGLY, THE PROFIT AMOUNTING TO RS. 717400/ - DERIVED ITA NO. 3062 /DEL/201 7 4 FROM TR ADING THROUGH MULTI COMMODITY EXCHANGE IS TREATED AS HER BUSINESS INCOME. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND FURNISHED THE WRITTEN SUBMISSIONS WHICH READ AS UNDER: - TO SUPPORT THE GROUNDS OF APPEAL IT IS SUBMITT ED AS UNDER: - 1. GROUND NO. 1 THE ASSESSEE HAS DULY FILED THE RETURN IN PURSUANCE TO NOTICE U/S 148 DECLARING INCOME AT RS.121821/ - WHICH WAS BELOW TAXABLE LIMIT AND THERE WAS NO INCOME WHICH HAS ESCAPED ASSESSMENT AND HENCE SECTION 148 IS NOT APPLICABLE. 2. GROUND NO. 2 (A) THE ID. A. O. MADE AN ADDITION OF RS.717400/ - ON ACCOUNT OF PROFIT FROM TRADING IN MULTI COMMODITY EXCHANGE (MCX) AS DISCUSSED IN PARA 4 OF HIS ORDER ON THE GROUND THAT ON PERUSAL OF AIR/CIB TRANSACTION GENERATED THROUGH SYSTEM IT IS GATHERED THAT THE APPELLANT ENTERED INTO TRANSACTIONS AMOUNTING TO RS. 11.18 CRORES ON ADHOC ESTIMATE OF INCOME OF 1% WAS MADE BY THE ID. A.O. WHILE FORMING AN INCOME HAS ESCAPED ASSESSMENT. THERE WAS NO BASIS WITH THE ID. A.O. TO'ESTIMATE INCOME AT 1% AND HENCE THE VERY BASIS ON WHICH OPINION WAS FORMED IS ARBITRARY AND ILLEGAL. (B) AS REGARDS INFORMATION U/S 133(6) OBTAINED FROM MCX SHOWING PROFIT OF RS.717 40O/ - AND ADDITION MADE IT IS SUBMITTED AS UNDER: - (I) A COPY OF COMPUTATION OF INCOME IS ENCLOSED AS APP - A. COPIES OF LETTERS FILED BY THE APPELLANT ARE ENCLOSED AS APP - B TO B2. WHERE THE APPELLANT HAS SUBMITTED THAT SHE HAS ONLY ONE SAVING BANK ACCOUNT W ITH ORIENTAL BANK OF COMMERCE MANSAROVER GARDEN NEW DELHI AND RECEIVED COMMISSION OF RS. 151377/ - ONLY AND TRANSACTIONS OF 11.18 CRORES WERE NOT CONDUCTED / ENTERED BY HER NOR ANY AGREEMENTS FOR 11.18 CRORES TRANSACTIONS WERE SIGNED BY HER. (II) MR. RAMAN KUMAR GROVER CONTACTED THE APPELLANT WITH A PROMISE THAT IF SHE DEPOSITED ABOUT RS.2 LACS, SHE WILL GET RETURN OF 100% OR MORE AND ACCORDINGLY HE GOT CERTAIN DOCUMENTS SIGNED FROM THE APPELLANT FOR TRADING IN COMMODITIES WITH MCX. IN ADDITION TO GENUINE TR ANSACTIONS DONE FOR AND ON BEHALF OF THE APPELLANT IT APPEARS THAT HE ALSO ENTERED HIS OWN TRANSACTIONS IN THE SAME FOLIO WITH MCX QUOTING APPELLANT'S PAN ABOUT WHICH SHE HAD ABSOLUTELY NO KNOWLEDGE NOR SHE RECEIVED ANY AMOUNT OR PROFIT OF THE TRANSACTIONS DONE BY THAT PERSON OF HIS OWN WITHOUT HER AUTHORITY. AS THE APPELLANT HAS ALREADY REFUSED BEFORE ASSESSING OFFICER THAT THE TRANSACTIONS DO NOT BELONG TO HER THE ONUS IS ON THE DEPARTMENT TO PROVE THAT SUCH TRANSACTIONS BELONG TO THE APPELLANT. (III) THE APPELLANT DID NOT ENTER INTO ANY TRANSACTION NOR SIGNED ANY PURCHASE OR SALE AGREEMENT FOR THE TRANSACTIONS SHOWN IN AIR/CIB EXCEPT TRANSACTIONS ON WHICH COMMISSION OF RS.151377/ - WAS EARNED. A COPY OF AFFIDAVIT FILED BEFORE ID. A.O. CONFIRMING THE COM MISSION OF RS. 151377/ - ONLY AND DENYING OTHER TRANSACTIONS IS ENCLOSED AS APP. C. (IV) LETTER OF RAMAN KUMAR GROVER ARE ENCLOSED AS APP - D TO DL 1 SHOWING COMMISSION EARNED FROM MCX AND BANK STATEMENT EVIDENCING THE SAME IS ENCLOSED AS APP. E TO (V) MR . RAMAN KUMAR GROVER HAS BEEN DECLARED AS DEFAULTER AS IS CLEAR FROM PHOTOCOPY OF NOTICE GIVEN BY MCX IN THE NEWSPAPER ENCLOSED AS APP. - F MR. RAMAN KUMAR GROVER IS BEHIND BARS OR OTHERWISE THE APPELLANT COULD HAVE PRODUCED HIM BEFORE THE ID. A.O. ITA NO. 3062 /DEL/201 7 5 OR BEFOR E YOUR HONOURS. (VI) IT APPEARS THAT EITHER THE REMAINING TRANSACTIONS SHOWN IN MCX STATEMENT HAVE BEEN WRONGLY TAKEN INTO THE APPELLANT'S FOLIO BY MCX OR MR. RAMAN KUMAR GROVER IN ORDER TO SAVE HIS INCOME TAX LIABILITY HAS INCLUDED HIS OWN INDIVIDUAL TRA NSACTIONS IN APPELLANT'S FOLIO WITH MCX. IN APPELLANT'S HUMBLE SUBMISSIONS THE APPELLANT CANNOT BE HELD ACCOUNTABLE FOR PROFIT/COMMISSION SHOWN IN HER AIR STATEMENT WHICH DOES NOT BELONG TO HER OR TRANSACTIONS FOR WHICH HAVE NEVER BEEN ENTERED BY HER. (VII )RELIANCE IS PLACED ON IT AT JUDGEMENT MUMBAI BENCH IN THE CASE OF M/S ANS LAW ASSOCIATES VS. ACIT ITA NO. 5181 /M/2012 ENCLOSED AS APP - G WHERE IT WAS HELD AS UNDER: - IT HAS BEEN HELD TIME AND AGAIN BY THIS TRIBUNAL THAT THE ADDITIONS MADE SOLELY ON THE RASIS OF AIR INFORMATION ARE NOT SUSTAINABLE IN THE EYES OF THE LAW. IF THE ASSESSEE DENIES MAT HE IS IN RECEIPT OF INCOME FROM A PARTICULAR SOURCE, IT IS FOR THE AO TO PROVE THAT THE ASSESSEE HAS RECEIVED INCOME AS THE ASSESSEE CANNOT PROVE THE NEGATIVE. RELIANCE CAN BE PLACED IN THIS RESPECT ON THE DECISION OF THE TRIBUNAL IN THE CASE OF 'DCIT VS. SHREE G. KUMAR' IN ITA NO.868/BANG/2009 DECIDED ON 22.10.10 AND ANOTHER CASE IN THE CASE OF 'AARTI RAMAN VS. DCIT' IN ITA NO.245/BANG/2012 DECIDED ON 05.10.12. COPY OF JUDGMENT IS ENCLOSED. RELIANCE IS ALSO PLACED ON ITAT JUDGEMENT IN AF FERGUSON & CO. VS. JCIT WHERE ALSO IT WAS HELD THAT ADDITION MADE SOLELY ON THE BASIS OF A IR IS NOT SUSTAINABLE COPY OF JUDGMENT IS ENCLOSED AS G - L IT IS THEREFORE REQUESTED THAT ADDITION OF RS.717400/ - MAY KINDLY BE DELETED. 3. GROUND NO. 3 THAT WITHOUT PREJUDICE TO GROUNDS ABOVE IT IS SUBMITTED THAT THE COMMISSION OF RS. 151377/ - AS SHOWN BY THE APPELLANT HAVING BEEN RECEIVED FROM MCX FORMS PART OF THE INCOME OF RS.717400/ - AS COMPUTED BY THE ID. A.O. IN PARA 4.1 THE ID. A.O. HAS HIMSELF ADMITTE D THAT THE APPELLANT MADE AN OVERALL PROFIT OF RS.717400/ - WHICH HAS BEEN VEHEMENTICALLY DENIED BY THE APPELLANT ON OATH. THUS THE INCOME OF RS. 1513777 - MAY KINDLY BE EXCLUDED IF THE ABOVE ADDITION OF RS.717400/ - IS UPHELD BY YOUR HONOURS THOUGH AS ALREADY SUBMITTED THE APPELLANT EARNED COMMISSION OF RS. 151377/ - ONLY. THE APPELLANT HAS CLAIMED EXPENSE OF RS.30,000/ - AGAINST HER COMMISSION INCOME WHICH IS VERY REASONABLE AND IT IS REQUESTED THAT THE SAME MAY KINDLY BE ALLOWED.' 5. THE LEARNED CIT(A) FORWAR DED THE AFORESAID SUBMISSIONS OF THE ASSESSEE TO THE ASSESSING OFFICER AND ASKED THE COMMENTS OF THE AO WHO SUBMITTED THAT THE DOCUMENTS FURNISHED BY THE ASSE SSEE ONLY CONFIRMED THAT SHE HAD MCX TRANSACTIONS ON MCX AND THAT THE EXCHANGE HAD CONFIRMED QUANT UM OF INCOME EARNED BY THE ASSESSEE . HE ALSO STATED THAT THE ASSESSEE HAD NOT FURNISHED ANY CONCRETE EVIDENCE TO NEGATE THE REPORT OF THE MCX , THOUGH ORAL DENIAL WAS MADE. THE LEARNED CIT(A) ASKED THE COMMENTS OF THE ASSESSEE ON THE REMAND REPORT OF THE AS SESSING OFFICER. T HE COMMENTS OF THE ITA NO. 3062 /DEL/201 7 6 ASSESSEE HAVE BEEN SUMMARISED BY THE LEARNED CIT(A) AT PAGE 12 OF THE IMPUGNED ORDER AS UNDER: - (A) THE ID. A.O. ONLY RELIED UPON AIR/CIB TRANSACTIONS WHICH ALONE CANNOT BE THE BASIS OF ADDITIONS SUSTAINABLE IN LAW AS WAS HELD IN VARIOUS DECIDED CASES. ( B ) THE APPELLANT FILED AN AFFIDAVIT BEFORE A.O. REFUTING THAT TRANSACTION AMOUNTING TO RS.11.18 CRORES AS GIVEN IN AIR/CIB WERE NOT ENTERED INTO BY HER AND FACTS GIVEN IN SUCH AFFIDAVIT COULD NOT BE REBUTED BY THE ID. A.O. ( C ) WHEREAS THE APPELLANT PRODUCED HER BANK STATEMENT FOR A.Y. 2010 - 11 TO PROVE THAT NEITHER TRANSACTIONS AMOUNT OF RS. 11.18 CRORES NOR ANY OTHER COMMISSION EXCEPT OF RS. 151377/ - WAS RECEIVED BY HER. THE ID. A.O. COULD NOT PRODUCE ANY EVIDENCE AS TO H OW THE TRANSACTION AMOUNT WAS RECEIVED BY THE APPELLANT OR ANY EXTRA INCOME EARNED BY HER THROUGH ANY OTHER BANK ACCOUNT ETC. ( D ) THE APPELLANT FILED COVERING LETTERS ISSUED BY MR. RAMAN KUMAR GROVER SHOWING COMMISSION EARNED BY THE APPELLANT WHICH COULD NOT BE REFUTED BY THE ID. A.O. NOR THE L D. A.O. COULD PRODUCE ANY OTHER DOCUMENTARY EVIDENCE VIDE WHICH THE TRANSACTIONS AMOUNT OR ANY OTHER INCOME COULD HAVE BEEN SENT. THUS IN APPELLANT S HUMBLE SUBMISSION THERE IS NO BASIS WITH THE ID. A.O. TO MAKE THE ABOVE ADDITION OF RS.717400/ - AND HENCE THE ABOVE ADDITION MAY KINDLY BE DELETED. 6. THE ASSESSEE FURTHER SUBMITTED TO THE LEARNED CIT(A) THAT THE COMMISSION OF RS. 1,51,377/ - W AS SHOWN BY THE ASSESSEE HAVING BEEN RECEIVED FROM MCX , WHICH WAS PART OF THE INCOME OF RS. 7,17,400/ - AS COMPUTED BY THE AO THEREFORE, THE SAME MAY BE EXCLUDED FROM THE ADDITION OF RS. 7,17,400/ - AND THAT THE COMMISSION ASSUMED BY THE ASSESSING OFFICER AT 1% WAS VERY EXCESSIVE AND WITHOUT ANY BASIS. THE ASSESSEE FURNISHED THE WRITTEN SUBMISSIONS VIDE LETT ER DATED 20.3.2017 BEFORE THE LEARNED CIT(A) WHICH IS REPRODUCED VERBATIM AS UNDER: - TO SUPPORT THE GROUNDS OF APPEAL THE APPELLANT HAS ALREADY FILED WRITTEN SUBMISSIONS BEFORE YOUR HONOURS ON 10.05.2016 & 23.02.2017. A CERTIFICATE FROM RAMAN KUMAR GROVER MEMBER MCX OF INDIA LTD. DATED 05.03.2017 IS ENCLOSED TO PROVE THAT THE ASSESSEE WAS NEITHER ENTITLED TO NOR RECEIVED ANY OTHER COMMISSION OR PROFIT FROM MCX INDIA OTHER THAN 151377/ - SHOWN BY HER IN THE INCOME TAX RETURN. IT IS ONCE AGAIN SUBMITTED AS FO LLOWS: - 1 . THE APPELLANT NEVER RECEIVED ANY OTHER COMMISSION AS AFFIRMED BY HER ITA NO. 3062 /DEL/201 7 7 IN AFFIDAVIT ALREADY FILED BEFORE A.O. AND A COPY BEFORE YOUR HONOURS. THE APPELLANT HAS NEVER BEEN EXAMINED AN OATH ON THIS AFFIDAVIT. 2 . THE ASSESSEE HAS DENIED HAVING ANY OTHER B ANK ACCOUNT AND HENCE IT WAS THE DUTY OF ID. A.O. TO PROVE THAT SHE RECEIVED COMMISSION IN ANY OTHER BANK ACCOUNT OR BY ANY OTHER MODE. 3 . IT APPEARS THAT SOMEBODY HAS USED ASSESSEE'S PAN WITH MCX OF INDIA LTD. TO WHOM THE COMMISSION HAVE BEEN REMITTED BY MCX OF INDIA. THE PRINCIPAL OFFICER OF MCX OF INDIA SHOULD HAVE BEEN CALLED U/S 131 TO RECORD STATEMENT AND OBTAIN DOCUMENTARY EVIDENCE OF REMITTING COMMISSION U/S 133(6) WHICH HAS NOT BEEN DONE. 4 . THE APPELLANT FILED COVERING LETTERS ISSUED BY MR. RAMAN KUMAR GROVER SHOWING COMMISSION EARNED BY THE APPELLANT WHICH COULD NOT BE REFUTED BY THE ID. A.O. NOR THE ID. A.O. COULD PRODUCE ANY OTHER DOCUMENTARY EVIDENCE VIDE WHICH INCOME COULD HAVE BEEN SENT. THUS IN APPELLANT'S HUMBLE SUBMISSION THERE IS NO BASIS WITH THE ID. A.O. TO MAKE THE ABOVE ADDITION OF RS.717400/ - AND HENCE THE ABOVE ADDITION MAY KINDLY B E DELETED. 7. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SUSTAINED THE ADDITION OF RS. 5,66,023/ - BY OBSERVING AS UNDER: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO AND JUDICIAL PRONOUNCEMENTS OF HIGHER APPELLATE AUTHORITIES AND THE HON BLE COURTS RELIED UPON BY THE LD. AR & IN MY OPINION THE LD. AO IS JUSTIFIED IN MAKING ADDITION O F TRADING INCOME IN MCX AS HE HAD SUFFICIENT MATERIAL WITH HIM TO FORM HIS REASON TO BELIEF THAT INCOME ON ACCOUNT OF MCX TRANSACTIONS HAD ESCAPED ASSESSMENT. SUBSEQUENTLY, ENQUIRIES CONDUCTED BY HIM FROM MULTI COMMODITY EXCHANGE PROVED RIGHT AND IT WAS CO NFIRMED THAT ASSESSEE HAD EARNED INCOME OF RS. 7,17,400/ - FROM MCX TRANSACTIONS WHICH WAS NOT OFFERED FOR TAXATION AS SHE FAILED TO FILE HER ITR FOR AY 2010 - 11. IN VIEW OF THE ENQUIRIES CONDUCTED BY THE LD. AO FROM MULTI COMMODITY EXCHANGE IT IS PROVED BEY OND DOUBT THAT ASSESSEE HAD EARNED INCOME OF RS. 7,17,400/ - FROM TRANSACTIONS OF MCX WHICH WERE NOT OFFERED FOR TAXATION BY THE ASSESSEE. FURTHER, I INCLINE TO AGREE WITH THE CONTENTION OF THE LD. AR THAT THE COMMISSION OF RS. 1,51,377/ - AS SHOWN BY THE APPELLANT HAVING BEEN RECEIVED FROM MCX FORMS PART OF THE INCOME OF RS. 7,17,400/ - AS COMPUTED BY THE LD. AO. ACCORDINGLY, THE ADDITION OF RS. 1,51,377/ - IS DELETED & THE ADDITION OF RS. 5,66,023/ - (7,17,400 - 1,51,377 ) IS CONFIRMED. HENCE, THE GROUND NOS. 2 & 3 ARE PARTLY ALLOWED. 8 . NOW THE ASSESSEE IS IN APPEAL. ITA NO. 3062 /DEL/201 7 8 9 . THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE TRANSACTIONS WORTH RS. 11.18 CRORE WERE NOT CARRIED OUT B Y THE ASSESSEE IN MCX AND IT APPEARS THAT SHRI. RAMAN KUMAR GROVER HAD ENTERED HIS OWN TRANSACTIONS WITH MCX , QUOTING ASSESSEE S PAN ABOUT WHICH THE ASSESSEE HAD ABSOLUTELY NO KNOWLEDGE AND SIMILAR SUBMISSIONS WERE MADE BEFORE THE AO VIDE LETTER DATED 30.3 .2015 , A REFERENCE WAS MADE TO PAGE NO. 10 OF THE ASSESSEE S PAPER BOOK. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTIONS TOWARDS PAGE NO S . 11 TO 19 OF THE ASSESSEE S PAPER BOOK WHICH ARE THE COP IES OF THE DETAILS OBTAINED BY THE AO FROM MCX U NDER SECTION 133(6) OF THE ACT. OUR ATTENTION WAS DRAWN TOWARDS PAGE NO. 12 WHEREIN IT WAS MENTIONED THAT THE MEMBER I.D. 28370 RAMAN KUMAR GROVER HAD BEEN DECLARED DEFAULTER W.E.F. 26 TH JULY, 2012 VIDE EXCHANGE CIRCULAR 278 DATED AGAINST 02,2012. 10. T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE EXCHANGE MCX SETTLES EXECUTED TRADES WITH THEIR CLEARING MEMBERS AND DOES NOT TRANSACT OR DEAL WITH ANY INDIVIDUAL CLIENTS FOR SETTLEMENT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE ON LY OBTAINED COMMISSION AGGREGATING TO RS. 1,51,377/ - FROM SHRI. RAMAN KUMAR GROVER. OUR ATTENTION WAS DRAWN TOWARDS PAGE NOS. 23 TO 31 OF THE ASSESSEE S PAPER BOOK IT WAS STATED THAT IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH ORIENTAL BANK OF COMMERCE, MANSAR OVAR GARDEN, NEW DELHI, THE COMMISSION EARNED FROM RAMAN KUMAR GROVER AMOUNTING TO RS. 1,51,377/ - WAS CREDITED . OUR ATTENTION WAS ALSO DRAWN TOWARDS PAGE NO. 49 OF THE ASSESSEE S PAPER BOOK WHICH IS A COPY OF A CERTIFICATE ISSUED BY SHRI. RAMAN KUMAR GROVE R WHO CERTIFIED THAT THE ASSESSEE EARNED COMMISSION OF RS. 1,51,377/ - FOR THE YEAR ENDED ON 31.3.2010 AND THAT SHE WAS NEITHER ENTITLED TO ANY COMMISSION OR PROFIT FROM MCX. T HE ASSESSEE ALSO REQUESTED TO ADMIT THE AFORESAID DOCUMENT AS ADDITIONAL EVIDENCE UNDER ITA NO. 3062 /DEL/201 7 9 RULE 29 OF THE INCOME TAX ( AT ) RULES , 1963 . IN HIS RIVAL SUBMISSIONS, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 11. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE WAS NOT THE MEMBER OF THE EXCHANGE MCX RATHER SHE WAS ACTING THROUGH SHRI. RAMAN KUMAR GR OVER WHO WAS MEMBER OF MULTI C OMMODITY E XCHANGE OF INDIA LIMITED (MCX) AND LATER ON HE WAS DECLARED AS DEFAULTER. 12 . THE ASSESSEE ALSO FURNISHED A CERTIFICATE ISSUED BY RAMAN KUMAR GROVER, COPY OF WHICH IS PLACED AT PAGE NO. 49 OF THE ASSESSEE S PAPER BO OK IN THE SAID LETTER IT IS CLEARLY MENTIONED THAT THE ASSESSEE EARNED COMMISSION OF RS. 1,51,357/ - AND WAS NEITHER ENTITLED TO NOR RECEIVED ANY OTHER COMMISSION OR PROFIT FROM MCX INDIA LIMITED FOR THE YEAR ENDED ON 31.3.2010. HOWEVER, THE SAID LETTER WAS NOT AVAILABLE EITHER TO THE AO OR TO THE LEARNED CIT(A) BUT IT GOES TO THE ROO T OF THE MATTER , TO RESOLVE THE PRESENT CONTROVERSY . W E, THEREFORE, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE AO TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 1 3 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. P RONOUNCE D IN THE OP EN COURT AT THE TIME OF HEARING ITSELF I.E. ON 30 . 01.2018. SD/ - [ N.K. SAINI ] ACCOUNTANT MEMBER DATED: 30 .01.2018 SH ITA NO. 3062 /DEL/201 7 10 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR