SURESH KUMAR SARDA, MUMBAI V. ACIT 18(1), MUMBAI

ITA 3597/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4894 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 17-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B B RAJENDRA PRASAD
• Keywords: Business income; Transactions in derivatives; Set aside
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3597/M/2017 ASSESSMENT YEAR: 2012-13 SHRI SURESH KUMAR SARDA, 14/16, VITHALWADI, OVALWADI, BAJAJ CHAMBER, KALBADEVI ROAD, MUMBAI PAN: AAEPS 7055H VS. ACIT-18(1), EARNEST HOUSE, 2 ND FLOOR, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (RE SPONDENT) ITA NO.3991/M/2017 ASSESSMENT YEAR: 2012-13 ACIT-18(3), R.NO.609, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 VS. SHRI SURESH KUMAR SARDA, 14/16, OVALWADI, BAJAJ CHAMBER, KALBADEVI ROAD, VITHALWADI, MUMBAI 400 002 PAN: AAEPS 7055H (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI SAMPAT KUMAR KABRA, A.R. P.C. PARWAL, A.R. REVENUE BY : SHRI B.B. RAJENDRA PRASAD, D.R. DATE OF HEARING : 03.05.2019 DATE OF PRONOUNCEMENT : 17.05.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 2 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF COMMODITY TRANSACTIO N LOSS OF RS.40,06,684/- INCURRED THROUGH THE BROKER ADVENTURE INDIA BY HOLD ING THAT ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN CAST ON HIM AND PROVE THE GENU INENESS OF THE TRANSACTION. 2. THE ASSESSEE CRAVES, LEAVE TO, ADD TO, ALTER, AM END OR DELETE THE AFORESAID GROUND OF APPEAL FROM TIME TO TIME AS IT MAY BE ADV ISED UPTO THE DATE OF HEARING. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING THE DISALLOWANCE MADE BY THE A.O ON ACCOUNT OF ARTIFICIALLY BOOKED LOSSES BY THE ASSESSEE THROUGH 3 BROKERS NAM ELY, R.K. COMMODITY SERVICE PVT. LTD., ASHLAR COMMODITIES PVT. LTD. AND BHAIJEE COMMODITIES PVT. LTD ON THE PLATFORM OF NATIONAL SPOT EXCHANGE LTD. (NSEL) TO T HE EXTENT OF RS.14,89,56,190/- IGNORING THE FACT THAT THE A.O, DURING THE COURSE O F THE ASSESSMENT PROCEEDINGS, ESTABLISHED THAT THE ASSESSEE HAS INDULGED IN CIRCU LAR TRADING THROUGH CARTEL MEMBERS FOR BOOKING ARTIFICIAL LOSSES. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE BROKERS NAMELY, R.K. COMMODITY SERVICE PVT. LTD., ASHLAR COMMODITIES PVT. LTD, AND BHAIJEE COMMODITIES PVT. LTD HAVE ALLOWED THE ASSESSEE TO CARRY OUT HUGE TRANSACTIONS WITHOUT SEEKING ANY MARGIN MONEY WHICH IS HIGHLY IMPROBABLE AND AGAINST THE GU IDELINES SET BY THE SEBI. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT ALL THE TRA NSACTIONS WITH THE THREE BROKERS NAMELY, R.K. COMMODITY SERVICE PVT. LTD., ASHLAR CO MMODITIES PVT. LTD. AND BHAIJEE COMMODITIES PVT. LTD WERE CARRIED OUT IN THE LAST M ONTH OF THE FINANCIAL YEAR FOR BOOKING ARTIFICIAL LOSSES, WHEREAS FROM THE M UMBAI BASED BROKER THROUGH WHOM ASSESSEE HAS BOOKED PROFIT, HE CARRIED OUT TRA NSACTION DURING THE ENTIRE YEAR. 4. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE DISALLOWANCE MADE BY T HE A.O, WITHOUT CONSIDERING THAT THE AO HAS APPLIED THE RATIO OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) TO THE FACTS OF THE CASE OF THE ASSESSEE. 5. FOR THE ABOVE MENTIONED REASON AND ANY OTHER REASONS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE CIT(A) BE QUASHED AND THAT OF THE A.O. BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER A NY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 3 ITA NO.3991/M/2017 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE VARI OUS GROUNDS OF APPEAL IS AGAINST ALLOWING THE BOOKED LO SSES BY THE ASSESSEE THROUGH 3 BROKERS NAMELY R.K. COMMODITY SE RVICE PVT. LTD., ASHLAR COMMODITIES PVT. LTD. AND BHAIJEE COMM ODITIES PVT. LTD. ON THE PLATFORM OF NATIONAL SPOT EXCHANGE LTD. (HEREINAFTER REFERRED TO AS NSEL) TO THE EXTENT OF RS.14,89,56,1 90/- BY IGNORING THE FACTS ON RECORD AS BROUGHT OUT BY THE AO THAT SAID LOSSES WERE ARTIFICIAL AND MANAGED TO SET OFF AGAIN ST THE INCOME OF THE ASSESSEE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF TRADING IN COMMODITIES. DURING THE YEA R, THE ASSESSEE HAS SHOWN BUSINESS INCOME THROUGH SPECULAT IVE PROFIT IN DIFFERENT STOCK EXCHANGES. THE ASSESSEE EARNED SPECULATIVE PROFIT FROM TRADING IN COMMODITY OF RS.11,38,87,407 /- AS PER DETAILS BELOW: SR NO NAME OF BROKER AMOUNT PRO FIT /LOSS EXCHANGE 1. ADVENTURE INDIA 40,06,684 LOSS MCX 2. ANGEL COMMODITIES BROKERING PVT. LTD. 11,03,90,830 PROFIT NCDEX 3. ASHLAR COMMODITIES PVT. LTD. -5,52,06,198 LOSS NSEL 4. BHAIJEE COMMODITIES PVT. LTD. -6,82,10,766 LOSS NSEL 5. MOTILAL OSWAL COMMODITIES PVT. LTD. 20,37,17,852 PROFIT NCDEX 6. R.K. COMMODITIES SERVICES PVT. LTD. -7,02,72,500 LOSS NSEL TOTAL 11,39,17,746 ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 4 THUS THE AO OBSERVED THAT ASSESSEE HAS MADE HUGE P ROFITS OF RS.31,41,08,684/- FROM TRANSACTIONS MADE THROUGH MOTILAL OSWAL COMMODITIES PVT. LTD., ANGEL COMMODITIES BROK ERING PVT. LTD. WHILE HUGE LOSSES WERE BOOKED/MADE FROM OTHER BROKERS. SIMILARLY, LOSS OF RS.19,36,89,465/- WAS INCURRED I N RESPECT OF COMMODITY TRANSACTIONS ENTERED IN NATIONAL SPOT EXC HANGE LTD. THROUGH THREE BROKERS NAMELY R.K. COMMODITY SERVICE PVT. LTD., ASHLAR COMMODITIES PVT. LTD. AND BHAIJEE COMMODITIE S PVT. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ISSU ED NOTICE UNDER SECTION 133(6) OF THE ACT TO THESE BROKERS AN D ALSO TO THE STOCK EXCHANGE SEEKING THE DETAILS OF THESE TRANSAC TIONS. NSEL VIDE LETTER DATED 17.03.2015 FURNISHED A CD WITH DE TAILS OF COUNTER PARTIES PERTAINING TO ALL THESE TRANSACTION S OF THE ASSESSEE. THEREAFTER, THE AO ISSUED A SHOW CAUSE N OTICE DATED 18.03.2015 CALLING UPON THE ASSESSEE TO EXPLAIN THE VARIOUS DISCREPANCIES BETWEEN THE CONTRACT NOTE FURNISHED B Y THE BROKERS AND BY THE ASSESSEE. THE AO ALSO NOTED THA T THERE HAS BEEN MODIFICATION OF CODES IN RESPECT OF CERTAIN T RANSACTIONS. THE ASSESSEE REPLIED TO THE SAID SHOW CAUSE NOTICE VIDE WRITTEN SUBMISSION DATED 20.03.2015 AND ALL THESE ISSUES RA ISED BY THE AO. THE AO AFTER EXAMINING THE REPLY OF THE ASSESS EE AND AFTER VERIFYING ALL THE TRANSACTIONS IN RESPECT OF THREE BROKERS RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND MATCHE D THE SAME WITH THE INFORMATION PROVIDED BY THE BROKER AND NSE L AND HAS NOT DRAWN ANY ADVERSE INFERENCE ON THESE POINTS. T HEREAFTER, AO AGAIN ISSUED SHOW CAUSE NOTICE DATED 26.03.2015 STATING THAT APPROXIMATELY 70 TO 90 PERCENT ARE CIRCULAR T RANSACTIONS DONE ON EACH DAY BY BUYING AND SELLING SCRIPTS AMON GST THE THREE BROKERS AND THE AMOUNT OF LOSSES ON THE CIRCU LAR TRADING ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 5 WAS CALCULATED BY THE AO AT RS.16,15,73,610/- OUT O F TOTAL LOSS OF RS.19,36,89,465/-. THE ASSESSEE FILED REPLY DAT ED 28.03.2015 BEFORE THE AO THEREAFTER, BUT THE AO FOUND THE SAME AS NOT TENABLE AND FINALLY FRAMED THE ASSESSMENT BY RELYIN G ON THE CASE OF CIT VS. DURGAPRASAD MORE (1971) 82 ITR 540 SC AN D SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC) BY MAKING AN ADDITION OF RS.14,89,56,190/- FOR ARTIFICIAL LOSSES FROM CIRCUL AR TRADING FROM THREE PARTIES NAMELY R.K. COMMODITY SERVICE PVT. LT D., ASHLAR COMMODITIES PVT. LTD. AND BHAIJEE COMMODITIES PVT. AND ALSO ADDED RS.40,06,684/- ON THE GROUND THAT A LOSS CAN NOT BE ALLOWED ON A TRANSACTION WHICH HAS NOT TAKEN PLACE AND AS ALL THE BUYING AND SELLING DOCUMENTS WERE HELD TO BE FA LSE AND BOGUS TO DEFRAUD THE REVENUE AND DIFFER THE TAX LIA BILITY IN RESPECT OF TRANSACTIONS DONE THROUGH ADVENTURE IND IA AND FRAMED THE ASSESSMENT UNDER SECTION 143(3) DATED 31 .03.2015. 4. IN THE APPELLATE PROCEEDINGS, LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO ALLOW THE LOSS OF RS.14,89,56,190/- AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE. HOWEVER, THE LOSS OF RS.40,06,684/- WAS HELD TO BE RIGHTLY DISALLOWED WHICH WAS INCURRED WITH THE TRAN SACTION MADE THROUGH ADVENTURE INDIA ON MCX BY OBSERVING AND HOL DING AS UNDER: 5.2.3. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER, SUBMISSIONS OF THE APPELLANT, REMAND REPORT OF THE ASSESSING OFFICER A ND THE APPELLANT'S REJOINDER TO THE REMAND REPORT. THE AO HAS DISCUSSED THIS ISSUE AT PAGES 12 TO 14 OF HER ASSESSMENT ORDER AND HAS GIVEN THE REASONS FOR DISA LLOWING THE LOSS INCURRED BY THE APPELLANT IN COMMODITY TRANSACTIONS MADE THROUGH TH E THREE BROKERS NAMELY RK COMMODITIES SERVICE PRIVATE LTD, ASHLAR COMMODITIES PRIVATE LTD AND BHAIJEE COMMODITIES PRIVATE LTD ON THE NSEL EXCHANGE PLATFO RM. THE REASONS GIVEN IN HER ORDER ARE THAT THE APPELLANT HAS ONLY BOOKED A LOSS IN ALL TRANSACTIONS WITH THESE BROKERS, THE EOW OF THE MUMBAI POLICE IS INVESTIGAT ING THE NSEL SCAM AND IN MORE THAN 95% OF THE CASES THE COUNTERPARTY IS ONE OF TH E ABOVE THREE BROKERS AND IT IS A ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 6 CASE OF CIRCULAR TRADING TO GENERATE ARTIFICIAL LOS S. MOST OF THE LOSSES ARE BOOKED IN THE MONTH OF MARCH AND THEREFORE THEY FAIL THE TEST OF HUMAN PROBABILITIES. THE APPELLANT ON THE OTHER HAND EXPLAINED THE MODUS OPE RANDI OF THE TRANSACTIONS IN THE EXCHANGE AND CONTENDED THAT IN ONLINE TERMINAL, SELECTION OF BUYER AND SELLER IS BEYOND HUMAN CONTROL, AO DOUBTED THE GENUINENESS OF THE TRANSACTION WITHOUT BRINGING ANY SPECIFIC INFIRMITY OR FALSITY IN THE T RANSACTION ENTERED BY THE APPELLANT THROUGH THESE BROKERS. IN SIMILAR TRANSACTION AT NC DEX THE APPELLANT HAS EARNED PROFIT OF RS. 34.41 CRORES FROM HIS DEALING WITH TW O BROKERS AND THEREFORE THE LOSS OF RS. 19.37 CRORES INCURRED FROM HIS DEALING WITH THREE BROKERS AT NSEL CANNOT BE SAID TO BE PURCHASED LOSS. THE AO HERSELF ACCEPTED LOSS OF RS. 4.47 CRORES FROM THESE BROKERS AS GENUINE WHILE DISALLOWING THE LOSS OF RS, 14.90 CRORES. THE REPORT OF NSEL SCAM IS NOT RELEVANT AS THERE IS NO CHARGE AGAINST THE ASSESSEE OR THE THREE BROKERS WITH WHOM THE ASSESSEE HAS DEALT WITH, IN T HIS REPORT. THE BROKERS THROUGH WHOM THE APPELLANT TRANSACTED HAVE NOT BEEN BLACKLI STED IN SPITE OF THE NSEL SCAM. THE TEST OF HUMAN PROBABILITIES SUPPORTS THE CASE O F THE APPELLANT, WHEN HE HAD EARNED SUBSTANTIAL PROFIT IN COMMODITY TRANSACTION AND IN SUBSEQUENT YEARS ALSO SUCH PROFIT HAS BEEN DECLARED BY HIM IN THE RETURNS . THE AO IN THE REMAND PROCEEDINGS HAS CARRIED OUT VERIFICATION FROM NSEL, THE THREE BROKERS AND OTHER CLIENTS OF THESE BROKERS. THE ENQUIRIES CONDUCTED F ROM THE CLIENTS OF THESE THREE BROKERS REVEALED THAT MOST OF THEM HAVE ENTERED INT O COMMODITY TRANSACTIONS WITH THE BROKERS WHERE THE LOSSES/PROFIT INCURRED/EARNED BY THEM HAVE BEEN OFFERED TO TAX. THE AO HERSELF OUT OF THE TOTAL LOSS OF RS. 19 ,36,89,465/- INCURRED IN THESE TRANSACTIONS, ISSUED SHOW CAUSE NOTICE TO DISALLOW LOSS OF RS. 16,15,73,6107/- BUT FINALLY DISALLOWED ONLY A LOSS OF RS. 14,89,56,190/ - AND ACCEPTED THE LOSS OF RS. 4,47,33,275/- AS PER THE FOLLOWING DETAILS: NAME OF THE BROKER TOTAL LOSS (RS.) LOSS ALLOWED (RS-L LOSS DISALLOWED (RS.) ASHLAR COMMODITIES PVT. LTD. 5,50,99,270/- 1,52,09,620/- 3,98,89,650/- BHAIJEE COMMODITIES PVT. LTD. 6,81,05,890/- 1,90,93,130/- 4,90,12,760/- R.K. COMMODITIES SERVICES PVT. LTD. 7,00,88,240/- 1,00,34,460/- 6,00,53,780/- TOTAL AS PER AO 19,36,89,465/- 4,47,33,275/- 14,89,56,190/- CORRECT TOTAL 19,32,93,400/- 4,43,37,210/- 14,89,56,190/- 5.2.4. THE AO HAS NOT SUBSTANTIATED WHY PART OF THE LOSS INCURRED FROM SIMILAR TRANSACTIONS WITH THE SAME BROKERS IS ACCEPTED. THE AO HAS DISALLOWED THE LOSS OF RS. 40,06,6847/- INCURRED BY THE APPELLANT IN THE T RANSACTIONS WITH ADVENTURE INDIA AS MCX HAS INFORMED THAT ADVENTURE INDIA HAS NOT EX ECUTED ANY TRANSACTION ON ITS EXCHANGE PLATFORM AND THE INSPECTOR ENQUIRY REVEALE D THAT ADVENTURE INDIA IS NOT FOUND IN THE GIVEN ADDRESS. THIS DISALLOWANCE HAS B EEN CONFIRMED BY ME AT PARA ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 7 4.2, HOWEVER, IN RESPECT OF TRANSACTIONS WITH THESE THREE BROKERS, NSEL HAS INFORMED THAT THESE BROKERS ARE REGISTERED WITH IT AND THESE BROKERS HAVE ALSO CONFIRMED THAT THE ASSESSEE HAS ENTERED INTO COMMOD ITY TRANSACTIONS THROUGH THEM. THEREFORE, FOR PARITY OF REASONS, THE LOSS SU FFERED IN TRANSACTIONS WITH THESE THREE BROKERS BY THE APPELLANT CANNOT BE CONSIDERED AS NON-GENUINE OR PURCHASED LOSS UNLESS IT IS PROVED THAT THE AMOUNT PAID TO TH ESE BROKERS HAS COME BACK TO THE APPELLANT. THE LAW IS WELL-SETTLED THAT BURDEN TO P ROVE THAT THE APPARENT IS NOT REAL IS ON THE PERSON WHO CLAIMS SO AND THE SAME IS REQU IRED TO BE DISCHARGED BY BRINGING POSITIVE MATERIAL ON RECORD AND NOT ON HYP OTHESIS, SURMISES AND CONJECTURES. I FIND THAT THERE IS NO MATERIAL ON R ECORD TO CONCLUDE THAT THE LOSS INCURRED BY THE APPELLANT IN TRANSACTIONS WITH THES E THREE BROKERS IS AN ENGINEERED LOSS AND NOT A GENUINE LOSS. THE ASSESSING OFFICER APPEARS TO HAVE MADE THE DISALLOWANCE MERELY ON SUSPICION AND, SUSPICION HOW EVER STRONG IT MAY BE, CANNOT TAKE THE PLACE OF EVIDENCE AS HELD BY THE HON'BLE A PEX COURT IN THE CASE OF UMACHARAN SHAH & BROS CO VS CIT (1959) 37 ITR 271. THEREFORE, CONSIDERING THE ENTIRE FACTS OF THE CASE, IM NOT INCLINED TO AGREE WITH THE CONCLUSION OF THE AO THAT LOSS OF RS.14,89,56,190/- DISALLOWED BY HER IS NOT THE REAL LOSS BUT AN ENGINEERED LOSS. MORE SO WHEN SHE HERSELF HAS ACCEPTED THE LO SS OF RS.4,47,33,275/- WITHOUT GIVING ANY SUBSTANTIAL REASON. THIS GROUND OF APPE AL IS ALLOWED. 5. THE LD. D.R. VEHEMENTLY SUBMITTED BEFORE US THAT THE ORDER PASSED BY LD. CIT(A) IS BLATANTLY WRONG AND AGAINST THE PROVISION OF LAW ON THE GROUND THAT FICTITIOUS AND BOGUS LOSSES BOOKED BY THE ASSESSEE ON MCX AND NSEL THROUGH VARI OUS BROKERS THROUGH CIRCULAR TRANSACTIONS WHICH WERE PR IMARILY INTENDED TO OFFSET THE PROFITS EARNED ON NCDEX THRO UGH ANGEL COMMODITIES BROKERING PVT. LTD. RS.11,03,90,830/- A ND MOTILAL OSWAL COMMODITIES PVT. LTD. RS.20,37,17,852/-. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS MADE HUGE PROFITS O F RS.31,41,08,682/- THROUGH NCDEX TWO BROKERS MOTILAL OSWAL COMMODITIES PVT. LTD. AND ANGEL COMMODITIES BROKERI NG PVT. LTD. AND THUS THESE PROFITS WERE REDUCED BY BOOKING THE ARTIFICIAL LOSSES BY CHANGING THE CLIENT CODES. THE LD D.R. SUBMITTED THAT THIS IS NOT A CASE OF SINGLE TRANSACTION ENTERED IN TO BY THE ASSESSEE BUT A CIRCULAR TRADING RESORTED TO BY THE ASSESSEE TO MANIPULATE THE LOSSES. IN MAJORITY OF THE CASES TH E CORRESPONDING OR COUNTER PARTY IS THE THREE BROKERS THROUGH ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 8 WHOM THIS ARTIFICIAL LOSSES WERE GENERATED BY ENTER ING INTO 1800 TRANSACTIONS WHEN THERE ARE 600 BROKERS ON NSEL. THE LD. D.R. RELYING HEAVILY ON THE ORDER OF HONBLE SUPREM E COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) AND SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC) AR GUED THAT THIS WAS A FIT CASE TO APPLY THE DOCTRINE OF PREPON DERANCE OF PROBABILITIES. THE LD. D.R. SUBMITTED THAT LD. CIT (A) ALSO DIRECTED THE AO TO CONDUCT ENQUIRY REGARDING BENEFI CIARY OF THE LOSS TAKEN BY THE ASSESSEE FROM THREE BROKERS AS PE R THE COUNTER PARTY CLIENT CODE ANNEXED TO THE ASSESSMENT ORDER. THE LD. D.R. STATED THAT AO AFTER CARRYING OUT THE NECESSARY VER IFICATION HAS FILED A REMAND REPORT BEFORE LD. CIT(A) BY SUBMITTI NG THAT ON SOME CLIENTS NOTICE COULD NOT BE SERVED WHEREAS SOM E CLIENTS DID NOT RESPOND TO THE NOTICE AND ONE CLIENT SMT. VIJAYA LAXMI AGGARWAL DENIED HAVING DONE ANY TRANSACTION WITH BR OKER ASHLAR COMMODITIES PVT. LTD. THE LD. D.R. CONTENDED THAT LD. CIT(A) BY IGNORING THE REPORT OF THE AO HAS INCORRECTLY OB SERVED THAT ENQUIRIES CONDUCTED BY CLIENTS TO THESE BROKERS REV EALED THAT MOST OF THEM HAVE ENTERED INTO COMMODITY TRADING TR ANSACTIONS WITH BROKERS WHERE LOSSES/PROFITS WERE INCURRED OR PROFIT EARNED BY THEM HAS BEEN OFFERED TO TAX. THE LD. CIT(A) CO NFIRMED THE DISALLOWANCE OF RS.40,06,684/- INCURRED BY THE ASSE SSEE IN THE TRANSACTION WITH ADVENTURE INDIA ON MCX BUT HAS WRO NGLY ALLOWED THE LOSS OF RS.14,89,56,190/- INCURRED THRO UGH THREE BROKERS AS STATED ABOVE. THUS THE LD. D.R. PRAYED BEFORE THE BENCH THAT SINCE THE CASE OF THE ASSESSEE IS A CASE OF CIRCULAR TRADING AND ALL THE LOSSES WERE ARTIFICIAL AND ENGI NEERED AND THEREFORE ORDER OF LD. CIT(A) MAY BE SET ASIDE AND THAT OF AO MAY BE RESTORED. ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 9 6. PER CONTRA, THE LD. A.R. ARGUED BEFORE THE BENCH THAT MODUS OPERANDI OF THE TRANSACTIONS AS CARRIED OUT O N NSEL WAS VERY CLEAR AND TRANSPARENT WHICH IS ONLINE, AUTOMAT IC AND WITHOUT ANY INTERVENTION EXCEPT PUTTING TO SAUDA ON TERMINAL. THE LD. A.R. SUBMITTED THAT IT IS NOT PRACTICALLY POSSIBLE FOR ANYONE TO BUY QUANTITY FROM SPECIFIC SELLER ON HI GHER PRICE AND THEN TO SELL THE SAME QUANTITY TO THE SAME SELLER O N LOWER PRICE TO BOOK THE LOSSES. THE LD. A.R. FURTHER STATED TH AT ON ONLINE TERMINAL, SELECTION OF BUYERS AND SELLERS IS BEYOND HUMAN CONTROL AND IN ORDER TO PROVE THE TRANSACTION ENTER ED INTO WITH THREE BROKERS THE NECESSARY DOCUMENTS IN THE FORM O F CONTRACT NOTES, LEDGER ACCOUNTS OF THE BROKERS, BANK STATEME NTS SHOWING RECEIPT AND TRANSACTIONS OF PAYMENTS WERE PLACED BE FORE THE AUTHORITIES BELOW. THE LD. A.R. WHILE COUNTERING T HE ALLEGATION OF THE LD. D.R. STATED THAT AO HAS EVEN CROSS CONFI RMED THE SAME FROM BROKERS AND THESE TRANSACTIONS WERE ALSO VERIFIED FROM INFORMATION RECEIVED FROM NSEL BUT STILL THE A O DOUBTED THE GENUINENESS OF THESE TRANSACTIONS WITHOUT BRING ING ON RECORD ANY MATERIAL TO SHOW ANY SPECIFIC DEFECTS, I NFIRMITY OR FALSITY IN THE DOCUMENTS PRODUCED BY THE ASSESSEE I N SUPPORT OF THE SAID TRANSACTIONS. THE LD. A.R. WHILE REFERRIN G TO THE REMAND PROCEEDINGS STATED THAT AO HAS CARRIED OUT V ERIFICATION FROM THE ABOVE THREE BROKERS AND ALSO FROM THEIR CL IENTS. ALL THESE THREE BROKERS HAVE CONFIRMED THESE TRANSACTIO NS. FURTHER, THE CLIENTS OF THESE BROKERS HAVE ALSO CONFIRMED TH E SAID TRANSACTIONS IN REPLY TO NOTICE ISSUED UNDER SECTIO N 133(6) OF THE ACT. THOUGH THE LD. A.R. ADMITTED THAT IN SOME CAS ES THE NOTICE UNDER SECTION 133(6) COULD NOT BE SERVED WHICH MAY HAVE HAPPENED DUE TO CHANGE OF ADDRESS BUT WITHOUT ANY F URTHER ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 10 ENQUIRY, THE CONCLUSION OF THE AO THAT THESE TRANS ACTIONS ARE NOT GENUINE IS WRONG AND CONTRARY TO THE PROVISIONS OF LAW. THE LD. A.R. STATED THAT ONLY ONE CLIENT SMT. VIJAYALAXM I AGGARWAL HAS DENIED TRANSACTION BUT THE PAYMENT OF RS.6,71,6 40/- MADE BY ASHLAR COMMODITIES PVT. LTD. IS DULY CREDITED IN HER BANK ACCOUNT WHICH SHOWS THAT HER DENIAL TO THE TRANSACT ION IS FACTUALLY INCORRECT. THE LD. A.R. WHILE REFERRING TO THE ORDER OF AO SUBMITTED THAT EVEN THE AO HAS ALLOWED THE LOSS TO THE TUNE OF RS.4,47,33,275/- OUT OF THE TOTAL LOSS OF RS.19, 36,89,465/-. THE LD. A.R. WHILE COUNTERING THE ALLEGATION OF THE AO THAT ASSESSEE HAS NOT MADE PROFIT EVEN ON A SINGLE TRANS ACTION WITH THESE THREE BROKERS, THE LD. A.R. SUBMITTED THAT TR ANSACTIONS IN NSEL ARE SPOT TRANSACTION AND NOT FUTURE TRANSACTIO N. THEREFORE, AT THE END OF THE DAY EITHER SAUDA SHOUL D BE SQUARED OFF OR DELIVERY BE TAKEN. THE LD. A.R. SUBMITTED T HAT IT CAN NOT BE THRUST ON THE ASSESSEE AS TO WHY HE HAS SQUARED OFF THE SAUDA IN LOSS WHEN HE HAS OPTION OF TAKING DELIVERY BECAUSE ALL THESE ARE BUSINESS DECISIONS DEPENDING UPON THE AVA ILABILITY OF FUNDS, FUTURE MARKET ESTIMATION, COST OF FUNDS REQU IRED FOR INVESTMENTS AND OTHER AVAILABLE OPPORTUNITIES. THE LD. A.R. SUBMITTED THAT AO HAS ONLY SELECTED THE LOSS MAKING TRANSACTIONS OUT OF TOTAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE AND GAVE A FINDING THAT NO SINGLE TRANSACT ION WITH BROKERS AT NSEL HAS RESULTED INTO PROFIT. HOWEVER, THE AO HAS IGNORED THE BUSINESS CONSIDERATIONS AS THE TRADERS IN THIS LINE OF BUSINESS FOCUS ON THE OVERALL BUSINESS LOSS OR GAIN . THEREFORE, LINKING ALL THESE ISSUES WITH THE ASSESSEES INTENT ION TO BOOK LOSSES IS NOT CORRECT. ON THE ISSUE OF MARGIN MONE Y THE LD. A.R. SUBMITTED THAT ASSESSEE HAS ONLY CARRIED OUT SPOT TRANSACTION ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 11 AND THEREFORE NO MARGIN MONEY IS REQUIRED IN AS MUC H AS PAYMENT IS REQUIRED TO BE MADE IMMEDIATELY ON SETTL EMENT OF TRANSACTION OR ADJUSTED FROM THE ADVANCE ALREADY GI VEN WHEN CLIENT IS NEW TO THE BROKER. THE LD. A.R. VEHEMENT LY SUBMITTED THAT REPORT REGARDING NSEL SCAM/TRANSPARENCY IN NSE L IS NOT AT ALL RELEVANT IN AS MUCH AS NONE OF THESE REPORTS HAVE CHARGED THE ASSESSEE OR ANY OF THREE BROKERS WITH WHOM ASS ESSEE HAS DEALT WITH FOR DOING THESE TRANSACTIONS, THEREFORE THE LD. A.R. ARGUED THAT ON THE BASIS OF HEARSE REPORT OF SCAM I N NSEL THE TRANSACTION OF THE ASSESSEE CAN NOT BE HELD TO BE N ON GENUINE. ON THE ALLEGATION OF AO THAT ASSESSEE WAS CONSTANTL Y DEALING WITH THESE THREE BROKERS WHEN THERE ARE MORE THAN 6 00 BROKER MEMBERS OF NSEL. THE LD. A.R. SUBMITTED THAT AO HA S COMPLETELY IGNORED THE MODUS OPERANDI OF THE EXCHAN GE WHERE HUMAN INTERVENTIONS ARE NOT POSSIBLE AND ALL THESE TERMINALS ARE AUTOMATICALLY AND FULLY MECHANIZED. THEREFORE ALL THE PRESUMPTIONS OF THE AO IN REJECTING THE LOSS ARE WR ONG AND AGAINST THE FACTS OF THE CASE. FINALLY, THE LD. A. R. SUBMITTED THAT ASSESSEE WAS NOT CONFRONTED WITH ANY INVESTIGA TION REPORT OF THE ECONOMIC OFFENCE WING OF MUMBAI POLICE NOR ANY MATERIAL WAS BROUGHT ON RECORD BY THE AO THAT ASSESSEE OR AN Y OF THESE THREE BROKERS WERE PARTY TO THE NSEL SCAM. THEREFO RE, THE PRESUMPTION AND ASSUMPTION OF THE AO ON THE LOSS IN CURRED BY THE ASSESSEE ARE WITHOUT ANY BASIS AND MERIT REJECT ION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE IM PUGNED ORDER. WE OBSERVE FROM THE ORDER OF AO THAT IN THE NOTICE DATED 18.03.2015 THE AO STATED THAT ASSESSEE HAS ENGINEER ED ARTIFICIAL ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 12 LOSS THROUGH CLIENT CODE MODIFICATIONS THROUGH THES E BROKERS OF RS.86.75 LAKHS BUT WHEN THE ASSESSEE FILED WRITTEN SUBMISSION BUT FURTHER TAKING INTO CONSIDERATION THE SUBMISSIO N AND CONTENTIONS OF THE ASSESSEE AS MADE IN THE COURSE O F ASSESSMENT PROCEEDINGS THE AO DROPPED THE SAID ISSUE. THEREAF TER, THE AO CAME TO THE CONCLUSION THAT THE LOSS THROUGH CIRCUL AR TRADING WAS GENERATED TO THE TUNE OF RS.16,15,73,610/- WHIC H WAS AGAIN REPLIED BY THE ASSESSEE THEREAFTER THE AO DISALLOWE D LOSS OF RS.14,89,56,190/- OUT OF THE TOTAL LOSS OF RS.19,36 ,89,465/-. WE FURTHER NOTICE THAT THE ASSESSEE HAS FILED ALL T HE DOCUMENTARY EVIDENCES IN THE FORM OF LEDGER ACCOUNT S, BANK ACCOUNT STATEMENT SHOWING THE PAYMENT AND RECEIPT O F THE TRANSACTIONS BESIDES CONFIRMING THE TRANSACTION FRO M BROKERS AND NSEL AND ALSO FROM THE CLIENTS. IN OUR OPINION THE LD. CIT(A) HAS CONSIDERED ALL THESE ASPECTS OF THE MATT ER WHILE PASSING THE ORDER AND PASSED A VERY DETAILED AND RE ASONED ORDER CONSIDERING ALL THE ISSUES RAISED BY THE AO IN THE ASSESSMENT ORDER AND THEREFORE, WE DO NOT FIND ANY REASON TO I NTERFERE IN THE ORDER OF THE LD. CIT(A). WE NOTE THAT AO HAS NOT B ROUGHT ANY MATERIAL ON RECORD TO PROVE THE INFIRMITY/FALSITY I N THE DOCUMENT FURNISHED BY THE ASSESSEE IN SUPPORT OF THESE TRANS ACTIONS. IN OUR OPINION, THE AO CAN NOT ACT ON THE BASIS OF MER E PRESUMPTION AND ASSUMPTIONS. WE FURTHER FIND THAT NONE OF THESE BROKERS WERE EITHER IMPLICATED IN THE NSEL SC AM OR BLACKLISTED BY THE STOCK EXCHANGE INSPITE OF THE NS EL SCAM. IN OUR OPINION, THE AO HAS WRONGLY REJECTED THE LOSS O N THE TRANSACTIONS THROUGH THREE BROKERS TO THE TUNE OF RS.14,89,56,190/- WHILE ALLOWING A PART OF THE LOSS TO THE TUNE OF RS.4,47,33,275/- AS GENUINE. WE FURTHER FIND FROM THE FACTS ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 13 BEFORE US THAT NEITHER THE ASSESSEE NOR ANY OF THES E BROKERS WERE IMPLICATED IN ANY INVESTIGATION CARRIED OUT BY THE ECONOMIC OFFICE WING OF MUMBAI POLICE OR TAINTED IN THE NSE L SCAM. WE FURTHER FIND THAT IN THE SUBSEQUENT ASSESSMENT YEAR S I.E. AY. 2014-15 & 2015-16 ASSESSEE HAS DECLARED SUBSTANTIAL PROFIT FROM SUCH TRANSACTIONS. THUS WE ARE NOT IN AGREEME NT WITH THE CONCLUSION OF AO ON THE HUMAN PROBABILITIES. IN VI EW OF OUR DISCUSSION HEREINABOVE WE UPHELD THE ORDER OF LD. C IT(A) BY DISMISSING THE APPEAL OF THE REVENUE. ITA NO.3597/M/2017 8. THE ONLY ISSUE CHALLENGED BY THE ASSESSEE IS AGA INST THE ORDER OF LD. CIT(A) CONFIRMING THE DISALLOWANCE OF COMMODITY TRANSACTION OF LOSS OF RS.40,06,684/- INCURRED THRO UGH BROKER ADVENTURE INDIA BY HOLDING THAT ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN AND TO PROVE THE GENUINENESS OF THE TRAN SACTIONS. 9. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAS INC URRED THE LOSS OF RS.40,06,684/- IN COMMODITY TRADING THROUGH BROKER ADVENTURE INDIA REGISTRATION WITH MCX. THE AO COND UCTED ENQUIRY FROM MCX REGARDING THE LOSS SUFFERED BY THE ASSESSEE, HOWEVER, MCX VIDE REPLY DATED 21.01.2015 INTIMATED THAT APPLICANT IS NOT REGISTERED AS A CLIENT WITH THE AD VENTURE INDIA THOUGH HE IS A REGISTERED CLIENT WITH TRADING MEMBE R MOTILAL OSWAL COMMODITIES PVT. LTD. BUT NO TRADE IS EXECUTE D BY HIM. THEREAFTER, WHEN AN ENQUIRY WAS CONDUCTED THROUGH I NSPECTOR THE AO CAME TO KNOW THAT ADVENTURE INDIA DID NOT E XIST AT THE GIVEN ADDRESS AND THE ASSESSEE HAS NOT PRODUCED TH E PARTY TO PROVE THE GENUINENESS OF THE LOSS. THE AO CAME TO THE CONCLUSION THAT THE SAID LOSS CAN NOT BE TREATED AS GENUINE BY ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 14 MERE FACT THAT THE TRANSACTIONS WERE DONE THROUGH B ANKING CHANNELS AND THE INVOICES OF THE TRANSACTIONS WERE FILED WITH THE AO. THUS AO TREATED THE SAME AS BOGUS. 10. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) HA S CONFIRMED THE FINDING OF THE AO ON THE GROUND THAT ASSESSEE F AILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE LD. A.R. ARGUED BEFORE US THAT LOSS INCURRED BY THE ASSESSEE ON COMMODITY TRANSACTIONS THROUGH ADVENTURE INDIA IS SUPPORTED BY COPY OF THE LEDGER, BILLS, VOUCHERS AND BANK STATEMENTS. THE LD. A.R. SUBMITTED THAT THE AUTHORITIES BELOW HAVE ONLY DOUBTED THE GE NUINENESS OF THE TRANSACTIONS WITHOUT BRINGING ON RECORD ANY SPE CIFIC INFIRMITY OR DEFECTS IN THE DOCUMENTS PRODUCED BY T HE ASSESSEE IN SUPPORT OF THE SAID TRANSACTIONS. THE LD. A.R. ARGUED THAT THE AUTHORITIES BELOW HAVE FAILED TO ESTABLISH THAT CONTRACT NOTES WERE BOGUS AND FABRICATED AND NO PAYMENT WAS RECEIV ED. THE ONLY GROUND OF DISALLOWANCE OF LOSS WAS THAT THE MC X HAS INFORMED THAT NO TRADE WAS EXECUTED BY THE ASSESSEE ON EXCHANGE THROUGH ANY TRADING MEMBER OF THE EXCHANGE . THE LD. A.R. ARGUED THAT THE SAID TRANSACTION OF THE ASSESS EE CAN NOT BE DOUBTED MERELY ON THE BASIS OF DENIAL BY MCX BESIDE S THE PAYMENTS MADE BY THE ASSESSEE TO THE ADVENTURE INDI A COULD NOT BE ESTABLISHED TO BE NON GENUINE BY THE AUTHORI TIES BELOW AND THUS LOSS INCURRED BY THE ASSESSEE THROUGH ADVE NTURE INDIA CAN NOT BE HELD TO BE NON GENUINE. SO FAR AS THE N ON AVAILABILITY OF ADVENTURE INDIA AT THE GIVEN ADDRESS IS CONCERNE D, THE LD. A.R. SUBMITTED THAT ASSESSEE HAS TREATED THAT THE S AID PARTIES IN F.Y. 2011-12 AND IT IS QUITE LIKELY THAT BROKER HAS SHIFTED AT SOME OTHER PLACE WHEN THE INSPECTOR CONDUCTED THE E NQUIRY IN ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 15 2015. THE LD. A.R. SUBMITTED THAT ASSESSEE IS NOT IN THE KNOWLEDGE OF PRESENT ADDRESS OF THE ADVENTURE INDIA AS NO DEALING WITH THE SAID PARTY IS BEING DONE PRESENTLY . 11. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE DENIAL OF MCX THAT ASSESSEE IS A REGISTERED AS CLIENT WITH MO TILAL OSWAL COMMODITIES PVT. LTD. AND IS NOT REGISTERED AS CLIE NT WITH ADVENTURE INDIA. THE LD. D.R. ALSO SUBMITTED THAT THE SAID PARTY COULD NOT BE FOUND ON THE GIVEN ADDRESS AND T HUS THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN CAST UP ON IT TO PROVE THE GENUINENESS OF THESE TRANSACTIONS. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE OBSERVE FROM THE LETTER OF MCX THAT VIDE LETTER DATED 21.01.2015 THE SAID E XCHANGE HAS NOT DENIED THAT ADVENTURE INDIA IS NOT ITS TRADING MEMBER. THE MCX HAS ONLY STATED THAT ASSESSEE IS NOT REGISTERED AS A CLIENT OF ADVENTURE INDIA. WE FIND THAT ASSESSEE HAS FILED D OCUMENTARY EVIDENCES BY WAY OF INVOICE CUM CONTRACT NOTE IN RE SPECT OF TRANSACTIONS WITH ADVENTURE INDIA. IT IS ALSO QUIT E POSSIBLE THAT ADVENTURE INDIA HAS NOT REPORTED THE TRANSACTION IN THE STOCK EXCHANGE BUT HAS CARRIED OUT TRANSACTION OUTSIDE TH E STOCK EXCHANGE ON WHICH LOSS IS INCURRED BY THE ASSESSEE AND IS SETTLED BY MAKING PAYMENTS THROUGH ACCOUNT PAYEE CH EQUES. IN OUR OPINION, THE SAID LOSS CAN NOT BE DENIED TO THE ASSESSEE MERELY ON THE GROUND THAT SAID PARTY WAS NOT FOUND ON THE ADDRESS GIVEN. MOREOVER, THE AUTHORITIES BELOW COU LD NOT ESTABLISH THAT MONEY PAID TO THE ADVENTURE INDIA HA S COME BACK TO THE ASSESSEE. MOREOVER, WE FIND THAT ASSESSEE H AS DECLARED SUBSTANTIAL INCOME OF RS.11,39,70,746/- FROM COMMO DITY ITA NO.3597/M/2017 & ITA NO.3991/M/2017 SHRI SURESH KUMAR SARDA 16 TRADING TRANSACTIONS. UNDER THESE FACTS AND CIRCUM STANCES, WE HOLD THAT THE LOSS INCURRED BY THE ASSESSEE IN TRAN SACTION WITH THE ADVENTURE INDIA CAN NOT BE TREATED AS BOGUS ON THE GROUND THAT STOCK EXCHANGE HAS DENIED THAT ASSESSEE IS NOT REGISTERED AS CLIENT WITH THE ADVENTURE INDIA WHEN NOWHERE IT HAS BEEN DENIED THAT ADVENTURE INDIA IS NOT A TRADING MEMBER OF THE STOCK EXCHANGE. THE LOSS CAN NOT BE DISALLOWED ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS. ACCORDINGLY, WE ARE INCLINED TO ALLOW THE APPEAL OF THE ASSESSEE BY SETTING ASIDE T HE ORDER OF LD. CIT(A) ON THIS ISSUE. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.05.2019. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 17.05.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.