The Asstt. Commissioner of Income Tax, Circle-1(3), Ahmedabad V. M/s. Girishkumar Ramanlal Chokshi & Brothers, Ahmedabad

ITA 3336/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8180 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Speculation loss; Bad and doubtful debts
• Section: 143(3); 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER) ITA. NO: 3336/AHD/2016 (ASSESSMENT YEAR: 2012-13) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1(3), AHMEDABAD V/S M/S. GRISHKUMAR RAMANLAL CHOKSHI & BROTHERS 2335- 1/1, CHOKSHI MAHAJAN BUILDING, MANEK CHOWK, AHMEDABAD-380001 (APPELLANT) (RESPONDENT) PAN: AAAFG8187A APPELLANT BY : SHRI MUDIT NAGPAL, SR. D. R. RESPONDENT BY : SHRI SULABH PADSHAH ( )/ ORDER DATE OF HEARING : 23 -05-201 8 DATE OF PRONOUNCEMENT : 25-05-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-10, AHMEDABAD DATED 08.09.2016 PERTAINING TO A.Y. 2012- 13 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO.3336/ AHD/2016 . A.Y. 2012-13 2 (1) THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE DISALLOWANCE OF BAD DEBTS OF RS. 8,36,510/- MADE BY THE AO. (2) THAT THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION MADE BY THE AO ON ACCOUNT OF MCX LOSS TREATED AS SPECULATIO N LOSS TO RS. 41,300/- OUT OF THE TOTAL ADDITION OF RS.97,19,097/- MADE BY THE AO . 2. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE, ORDER U/S. 143(3) WAS PASSED ON 27/03/20165 DETERMINING THE TOTAL INCOME OF THE ASS ESSEE AT RS. 1,03,71,700/- AGAINST THE RETURNED INCOME OF RS. 23,38,979/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VER IFICATION OF TRADING & P&L ACCOUNT, IT WAS SEEN BY THE AO THAT THE ASSESSEE HA S DEBITED AN AMOUNT OF RS. 8,30,510/- AS BAD DEBTS. THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS AND NATURE OF SAID EXPENSES ALONG WITH NAME AND ADDRESS ES OF PARTIES WHOSE ACCOUNTS HAVE BEEN WRITTEN OFF. THE ASSESSEE SUBMIT TED A DETAILED REPLY WHICH IS ELABORATELY DISCUSSED IN THE ASSESSMENT ORDER AN D AN ADDITION OF RS. 8,30,510/- WAS MADE BY THE AO ON ACCOUNT OF BAD DEB TS. 4. AGAINST THE SAID ADDITION, ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD.CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE. 5. NOW DEPARTMENT IS BEFORE US. 6. WE HAVE GONE THROUGH THE RELEVANT RECORD IN THE IMP UGNED ORDER. IN SUPPORT OF ITS CONTENTION, ASSESSEE FILED A JUDGMENT OF JUR ISDICTIONAL HIGH COURT IN HIS ITA NO.3336/ AHD/2016 . A.Y. 2012-13 3 OWN CASE IN TAX APPEAL NO. 160 OF 2015 WHEREIN QUES TION BEFORE THE HONBLE HIGH COURT WAS THAT WHETHER THE APPELLATE TRIBUNAL HAS SUBSTANTIALLY E RRED IN RESTRICTING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF HEDGING LOSS TREATED AS SPECULATION LOSS TO RS. 1,01,417/- INSTEAD OF RS. 1,06,65,670/-? 7. AND HONBLE HIGH COURT HELD CONSIDERING THE AFORESA ID FACTS AND CIRCUMSTANCES OF THE CASE. IT CANNOT BE SAID THAT T HE LEARNED ITAT HAS COMMITTED ANY ERROR IN DISMISSING THE APPEAL PREFER RED BY THE REVENUE AND CONFIRMING THE ORDER PASSED BY THE LD. CIT(A) RESTR ICTING THE ADITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF HEDGING LOSS TR EATING IT AS SPECULATION LOSS TO RS. 1,01,417/- INSTEAD OF RS. 1,06,65,670/-. NO QUESTION OF LAW MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT T AX APPEAL. UNDER THE CIRCUMSTANCES, THE PRESENT TAX APPEAL DESERVES TO B E DISMISSED AND IS ACCORDINGLY DISMISSED. 8. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT IN WH ICH REVENUE APPEAL HAS BEEN DISMISSED. WE DISMISS THIS GROUND OF APPEAL. 9. SO FAR GROUND NO. 2 RELATING TO MCX LOSS IS CONCERN ED, ON VERIFICATION OF TRADING ACCOUNT, IT IS SEEN THAT THE ASSESSEE HAS D EBITED AN AMOUNT OF RS. 97,19,097/-. AS SUCH A NOTICE WAS ISSUED IN RESPONS E TO SUCH NOTICE, ASSESSEE REPLIED THE MCX TRADING DIFFERENCE OF RS. 97,19,097 /- CANNOT BE DISALLOWED UNDER SECTION 43(5) OF THE ACT, AS SAME IS ALLOWED BY CIT (A) IN A. Y. 2008-09, 2009-10 & 2010-11. THE ORDER OF CIT (A) DELETING TH E ADDITION MADE ON THIS GROUND BY A. O. HAS BEEN CONFIRMED BY ITAT VIDE ITS ORDER DATED. 19.09.2014. UNDER THE CIRCUMSTANCES, WE REQUEST YOU NOT TO DISA LLOW THE MCX TRADING ITA NO.3336/ AHD/2016 . A.Y. 2012-13 4 DIFFERENCE WHICH IS HEDGING LOSS AND NOT SPECULATIO N LOSS. BUT LD. A.O. WAS NOT AGREED WITH THE CONTENTION AND CITING A FEW JUDGMEN T ADDITION OF MCX LOSS TREATED AS SPECULATION LOSS OF RS. 97,19,097/-. 10. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE. 11. SO FAR DISALLOWANCE OF BAD DEBTS OF RS. 8,36,510/- MADE BY THE A.O. AND SUBSEQUENTLY DELETED BY THE LD. CIT(A). IN SUPPORT OF ITS CONTENTION, LD. A.R. CITED AN ORDER OF CO-ORDINATE BENCH IN ITA NO. 3259 /AHD/2015 IN THE MATTER OF DCIT VS. KUNVARJI COMMODITIES BROKERS PVT. LTD. : 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW QUA THE ISSUE. THERE IS NO DISPUTE THAT THE ASSESSEE HA S BEEN SHOWING BROKERAGE INCOME FROM THE TRANSACTIONS ENTERED INTO BY IT WITH ITS C LIENT. WE FIND THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE SPECIAL BENCH OF THE TRIBUNAL BOMBAY IN THE CASE OF SHREYAS S MORAKHIA AND THE SPECIAL BENCH DECISION HAS BEEN UP HELD BY THE HON'BLE HIGH COURT OF BOMBAY IN 342 ITR 285 WHEREIN THE HON'BLE HIGH COURT HELD THAT VALUE OF THE SHARE TRANSACTED BY A BROKER ON BEHALF OF IT S CLIENT IS VERY MUCH ALLOWABLE AS BAD DEBTS WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A), THEREFORE, NO INTERFERENCE IS CALLED FOR. 12. RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE C O-ORDINATE BENCH, WE DISMISS THIS GROUND OF APPEAL OF THE REVENUE. ITA NO.3336/ AHD/2016 . A.Y. 2012-13 5 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 25 - 05- 2018 SD/- SD/- (AMARJIT SINGH) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUD ICIAL MEMBER AHMEDABAD: DATED 25/05/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD