Shri Nagarmal Jain, Guwahati V. Income Tax Officer, Ward-1(3, Guwahati

ITA 369/GTY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1182 (ITAT-GUWAHATI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 24-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN JCIT SRDR
• Keywords: Unexplained cash credit; Transactions in derivatives
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH E COURT AT KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L.SAINI, ACCOUNTANT MEMBER ITA NO. 3 69 / GAU / 2018 ASSESSMENT YEAR :2014-15 NAGARMAL JAIN 3 RD FLOR, SUPARSHWA BHAWAN, NR. PAWAN SUPPLY CO. A.T. ROAD, GUWAHATI-009 [ PAN NO.AEPPJ 2336 B ] V/S . INCOME TAX OFFICER, WARD-1(3), AAYAKAR BHAWAN, CHRISTIAN BASTI, G.S. ROAD, GUWAHATI-781005 /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI M.C OMI NINGSHEN, JCIT SR-DR /DATE OF HEARING 11-12-2019 /DATE OF PRONOUNCEMENT 18-12-2019 / O R D E R PER BEMCH:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-1 GUWAHATIS O RDER DATED 17.09.2018 PASSED IN CASE NO.GUWA[A1]-165/16-17/111 INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT THE ASSESSEES B EHEST. WE ARE INFORMED THAT THE ASSESSEE HAS SUBMITTED AN ADJOURN MENT PETITION SEEKING POSTPONEMENT OF HEARING BUT NOBODY HAS COME TO PURSUE THE SAME. WE THEREFORE REJECT THE ASSESSEES ADJOURNMEN T PETITION. THE CASE IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. HE ARD LEARNED DEPARTMENTAL REPRESENTATIVE. CASE FILE PERUSED. ITA NO369/GAU/2018 ASSESSME NT YEAR: 2014-15 NAGARMAL JAIN VS. ITO WD-1(3), GUWA PAGE 2 2. IT TRANSPIRES DURING THE COURSE OF HEARING WITH THE ABLE ASSISTANCE OF LEARNED DEPARTMENTAL REPRESENTATIVE THAT BOTH THE L OWER AUTHORITIES HAVE TREATED THE ASSESSEES CLAIM OF PROFITS DERIVED FRO M COMMODITY EXCHANGE TRANSACTIONS AS UNEXPLAINED CASH CREDITS. THE CIT(A )S DETAILED DISCUSSION TO THIS EFFECT READS AS UNDER:- DECISION GROUND NOS. 1 & 4 THE ABOVE GROUNDS OF APPEAL BEING GENERAL IN NATURE , REQUIRE NO ADJUDICATION. GROUND NOS. 2 & 3 THE ABOVE GROUNDS OF APPEAL CHALLENGE AN ADDITION O F RS.6,89,956/- AND ARE BEING ADJUDICATED TOGETHER. I HAVE GONE THROUGH THE RELEVANT OBSERVATIONS OF TH E LD AO AS CONTAINED IN THE ORDER IMPUGNED, THE SUBMISSIONS OF THE APPELLANT AS ALSO THE MATERIAL PLACED BEFORE ME DURING THE COURS E OF APPELLATE PROCEEDINGS. THE APPELLANT HAD FILED THIS APPEAL AGAINST AN ADDI TION OF RS.6,89,956/- BEING THE DIFFERENCE BETWEEN THE AGGREGATE VALUE OF SALES AND THE AGGREGATE VALUE OF PURCHASES EXECUTED BY THE APPELL ANT ON THE NATIONAL / MULTI COMMODITY EXCHANGE O INDIA. PER CONTRA THE LD AO HAD MADE THE ADDITION SINCE THE APPELLANT COULD NOT FURNISH ANY EXPLANATION IN THIS REGARDS AND HAD ALSO AGREED TO OFFER THE INCOME GEN ERATED OUT OF COMMODITY EXCHANGE TRANSACTIONS DURING THE YEAR 201 3-14.THE RELEVANT OBSERVATIONS / FINDINGS OF THE LD AO ARE CONTAINE D IN PARA 5 OF THE ORDER IMPUGNED, WHICH IS A UNDER:- 5. MOREOVER, AS PER DEPARTMENTAL CIB INFORMATION A VAILABLE ON RECORD, ASSESSEE HAS UNDERTAKEN NATIONAL / MULTI COMMODITY EXCHANGE CONTRACT DURING FY 2013-14 FOR SALE OR PURCHASE THROUGH NATIONAL STOCK EXCHANGE. THE TOTAL TRANSAC TION VALUE BEING RS.3,77,16,186/-. WHEN CONFRONTED WITH THIS I SSUE, THE A/R OF THE ASSESSEE COULD NOT OFFER ANY SATISFACTORY EX PLANATION, HOWEVER, HE AGREED TO OFFER THE INCOME GENERATED OU T OF COMMODITY EXCHANGE TRANSACTION DURING THE YEAR 201 3-14. DURING THE COURSE OF APPELLANT PROCEEDINGS, THE APP ELLANT HAD CONTENDED THAT SUFFICIENT OPPORTUNITY WERE NOT PERM ITTED TO HIM BY THE LD AO. THE APPELLANT HAD ALSO CONTENDED THAT ALL TH E TRANSACTIONS WERE ENTERED INTO THROUGH A SAME BROKER AND UNDER A SAME CLIENT CODE. THE APPELLANT HAD ALSO CONTENDED THAT NO PAYMENTS / REC EIPTS IN REGARD TO TRANSACTIONS ENTERED INTO ON NATIONAL / MULTI COMMO DITY EXCHANGE OF ITA NO369/GAU/2018 ASSESSME NT YEAR: 2014-15 NAGARMAL JAIN VS. ITO WD-1(3), GUWA PAGE 3 INDIA WERE MADE OR RECEIVED BY HIM AND THAT THE APP ELLANT WAS NOT CONFRONTED WITH ANY SUCH DETAILS AS ALLEGED. IT IS PERTINENT TO MENTION HERE THAT EVEN THOUGH TH E APPELLANT HAD ALLEGED THAT NO DETAILS OF ANY SUCH TRANSACTIONS WE RE MADE AVAILABLE TO HIM BY THE LD IT IS INCOMPREHENSIBLE THEN AS TO WH Y IN PARA 5 OF THE ORDER IMPUGNED, THE LD AO HAD RECORDED A FINDINGS T HAT WHEN CONFRONTED WITH THIS ISSUE, THE A/R OF THE APPELLAN T COULD NOT OFFER ANY SATISFACTORY EXPLANATION, HOWEVER, HE AGREED TO OFF ER THE INCOME GENERATED OUT OF COMMODITY EXCHANGE TRANSACTION DUR ING THE YEAR 2013-14. THUS, IT IS CLEAR THAT BEFORE THE LD AO TH E APPELLANT HAD AGREED FOR ADDITION, BEFORE THE UNDERSIGNED A PLEA HAS BEEN TAKEN THAT THE DETAILS OF THE ALLEGED TRANSACTIONS WERE NOT CO NFRONTED. BE THAT AS IT MAY, THE SITUATION IS SUCH AS IS CONTENDED BY THE A PPELLANT, THERE IS NO AFFIDAVIT IN THIS REGARD, OR ANY CONFIRMATION FROM THE THEN A/R OF THE APPELLANT, WHO REPRESENTED THE APPELLANT BEFORE THE LD AO DULY NEGATING THE OBSERVATIONS OF THE LD AO. IN FACT, F ROM A PERUSAL OF THE ORDER IT IS INCOMPREHENSIBLE AS TO WHY THE APPELLAN TS INTRA DAY TRANSACTIONS WERE TREATED AS HIS INCOME FROM OTHER SOURCES AND AS TO WHETHER LOOKING INTO FREQUENCY, VOLUME, ROUTINE, ET C., THE SAID ACTIVITY COULD HAVE BEEN TREATED AS A BUSINESS OR OTHERWISE. THE VERY CONDUCT OF THE APPELLANT IN OFFERING HIS INCOME FROM INTRA DAY TRANSACTIONS AS HIS INCOME FROM OTHER SOURCES, ONLY GOES TO SUGGEST THA T THE APPELLANT WAS SHODDY QUA HIS TRANSACTIONS IN SHARES AND SECURITIES. IN THE ABSENCE OF ANY FURTHER DETAILS, SUCH AS TRANSACTIONS WISE EXPL ANATION OF SUCH ITEMS, COPIES OF BROKERS FINANCIAL LEDGER, CONFIRMATION F ROM THE BROKER THAT THE TRANSACTIONS IN NATIONAL / MULTI COMMODITY EXCHANGE OF INDIA, AS DENIED BY THE APPELLANT, DID NOT PERTAIN TO THE APPELLANT, IT IS CLEAR THAT THE RELIEF CLAIMED CANNOT BE PERMITTED TO THE APPELLANT. IN FA CT, LOOKING INTO THE FACT THAT THE APPELLANT HAD EXECUTED UMPTEEN TRANSA CTIONS, IT S NOT DIGESTIBLE THAT THE APPELLANT WAS NOT RECONCILING H IS TRANSACTIONS AS PER THE FINANCIAL LEDGER OF THE BROKER OR THAT THE BROK ERS FINANCIAL LEDGER WAS NOT BEING RECEIVED BY HIM AND IN CASE ANY SUCH INFI RMITY DID EXIST, AS TO WHY AND WHETHER THE APPELLANT HAD MADE ANY COMMUNIC ATION IN THIS REGARD WITH THE BROKER OR WITH THE CORRESPONDING NA TIONAL / MULTI COMMODITY EXCHANGE OF INDIA. IN VIEW OF THE ABOVE O BSERVATIONS, I DO NOT FIND ANY MERIT IN THE CONTENTION OF THE APPELLA NT. THE ABOVE GROUNDS OF APPEAL ARE DISMISSED . 3. THE REVENUES CASE IN VIEW OF THE ABOVE EXTRACTE D DETAILED DISCUSSION IN THE CIT(A)S ORDER IS THAT THE ASSESSEE COULD NO T PROVE THE RELEVANT EVIDENCE IN SUPPORT OF HAVING DERIVED THE IMPUGNED PROFITS FROM COMMODITY TRANSACTIONS. WE NOTICE THAT NEITHER THE LOWER AUTH ORITIES HAVE DISCUSSED OR EXAMINED THE ASSESSEES CORRESPONDING DETAILS OF TH E COMMODITY TRANSACTIONS ITA NO369/GAU/2018 ASSESSME NT YEAR: 2014-15 NAGARMAL JAIN VS. ITO WD-1(3), GUWA PAGE 4 NOR HAVE THEY ISSUED ANY NOTICE TO THE CONCERNED BR OKER AS WELL AS THE STOCK EXCHANGE FOR NECESSARY FACTUAL VERIFICATION. WE THE REFORE DEEM IT APPROPRIATE TO RESTORE THE INSTANT SOLE ISSUE BACK TO THE ASSES SING OFFICER FOR AFRESH ADJUDICATION AS PER LAW WITHIN THREE EFFECTIVE OPPO RTUNITIES OF HEARING. 4. THIS ASSESSEES APPEAL IS ALLOWED FOR STATISTICA L PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT 18/ 12/2019 SD/- SD/- (A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) JUDICIAL MEMBER) KOLKATA, *DKP - 18 / 12 /201 9 / / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-NAGARMAL JAIN 3 RD FL, SUPARSHWA BHWAN, NR. PAWAN SUPPLY CO. A.T. ROAD, GUWAHA TI 2. /RESPONDENT- ITO WARD-1(3), AAYAKAR BHAWAN, G.S. R OAD, GUWAHATI-05 3. * - / CONCERNED CIT GUWAHATI 4. -- / CIT (A) GUWAHATI 5. 0 33*, *, / DR, ITAT, GUWAHATI 6. 7 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO *,