LAXMAN DAS BANSAL, Jaipur V. ITO, BHARATPUR

ITA 446/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5180 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 09-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJEEV PANDEY; DAKSHAYANI PANDEY
• Keywords: Business income; Additional evidence; Speculation loss
• Section: 143(3); 43(5); 263; 12

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA- @ ITA NO. 446/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 LAXMAN DAS BANSAL, PROP.- M/S LAXMAN DAS & SONS, 7- A, INDRAGANJ, GALLA MANDI, DHOLPUR- 328001. CUKE VS. INCOME TAX OFFICER, WARD-3, BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ABMPB 9022 C VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI RAJEEV PANDEY (CA) & SHRI DAKSHAYANI PANDEY (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI M.S. MEENA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/06/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 20/06/2016 VKNS'K @ ORDER PER: LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 03/03/2014 PASSED BY THE LD CIT(A), ALWAR FOR THE A. Y. 2006-07. THE GROUNDS TAKEN BY THE ASSESSEE IN APPEAL ARE AS UNDE R:- 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD. COMMISSIONER OF INCOME TAX HAS ERRED- (I) IN CONFORMING THE ORDER PASSED U/S 143(3)/263/11 OF THE I.T. ACT, 1961, WHICH IS ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 2 UNJUST AND NOT FOLLOWING PROVISIONS OF LAW AND WHICH DESERVES TO BE ANNULLED. (II) IN CONFORMING DISALLOWANCE OF LOSS OF RS. 18,31,596/- AND HOLDING THE SAME TO BE SPECULATION LOSS AND FURTHER ERRED IN NOR FOLLOWING PROVISIONS OF LAW. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS PROPRIETOR OF M/S LAXMAN DAS BANSAL & SONS, DHOLPUR & CARRYING ON BUSINESS OF PURCHASE & SELL OF GRAIN AND OTHER KIND OF AGRICULT URE MERCHANDISE FOR PAST MANY YEARS. DURING THE COURSE OF THE BUSINESS THE ASSESSEE FIRM HAS BEEN DEALING IN PURCHASE AND SELLING OF VARIOUS COMMODITIES LIKE MUSTARD SEEDS, GWAR, GUAM, CHANA, SAUNF ETC. IN THE LINE OF BUSINESS ASSESSEE GENERALLY PURCHASES THE GOODS FROM WHOLESAL ERS AND SELLS THE SAME TO WHOLESALER, OIL MILLS AND OTHER DEALERS BY E FFECTING ACTUAL DELIVERY OF GOODS. IT IS USUAL PRACTICE OF SUCH TRA DE TO FIRST BUY THE COMMODITIES AND THEN SELL THE SAME. NORMAL UP AND D OWN OF PRICE IS USUAL IN BUSINESS AND DEPENDS UPON THE PRODUCTION / GROWTH OF CROP AND CONSUMPTION REQUIREMENT. WHEN THE MARKET IS DOWN THE TRADER NOT TO SUFFER LOSS HOLDS HIS STOCK AND SOMETIME TO AVER AGE THE COST PURCHASES MORE SO THAT HE IS ABLE TO SELL THE STOCK AND LESSEN HIS LOSS. IN PRICE RISE THE TRADER TRIES TO PURCHASE AT LOWER COST AND SELL AT HIGHER PRICE. THIS UP AND DOWN OF THE PRICE OF COMMODITY RES ULTS IN PROFIT OR ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 3 LOSS. ASSESSEE SUBMITS THAT HE MAINTAINS FULL RECOR D OF HIS STOCK BOTH OPENING AND CLOSING AS WELL AS PURCHASE AND SALE AND THE SAME WERE PRODUCED BEFORE THE AO WHO HAD MADE ASSESSMENT U/S 1 43(3) DATED 26.12.2008. THAT ASSESSMENT OF INCOME WAS COMPLETED F OR THE YEAR AFTER DISCUSSION & ORDER DT. 26.12.2008 WAS PASSED U /S 143(2) OF INCOME TAX ACT, 1961 AT TAXABLE INCOME OF RS. 2,60,00 9/- (AGGREGATE RS. 1,79,730) DECLARED BY THE ASSESSEE. ASSESSEE HA D COOPERATED IN FURNISHING DETAILS & BOOKS OF ACCOUNTS WERE EXAMINED TO THE SATISFACTION OF LD AO. THEREAFTER SHOW CAUSE NOTICE WA S ISSUED BY OFFICE OF ID. CIT, ALWAR AND HE HAS PASSED ORDER DT. 25.3.20 11 WHEREIN HE HOLDS AT END OF THE ORDER AS UNDER:- FROM THE FACTS DISCUSSED ABOVE, IT IS ABUNDANTLY C LEAR THAT THE ASSESSEE WAS NOT A MEMBER OF NCDEX AS NO ACCOUNT STATEMENT FROM NCDEX WAS PRODUCED IN SUPPORT. AS PHYSICAL DELIVERY OF COMMODITIES WAS NOT RECEIVED SO THE WHOLE TRANSACTION IS CONSIDERED AS SPECULATIVE LOSS, WHICH CANNOT BE ALLOWED AGAINST NOR MAL PROFIT FROM BUSINESS INCOME. HE WAS MERELY ENGAGED I N THE BUSINESS OF SALE AND PURCHASE OF GRAIN SO THE L OSS CLAIMED IS NOT TENABLE. HENCE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM LOSS AS BUSINESS LOSS AND THE S AME IS TREATED AS SPECULATIVE LOSS AMOUNTING TO RS. 18,31,590/- WHICH WAS CLAIMED BY ASSESSEE AND ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 4 ERRONEOUSLY ALLOWED BY THE AO WHILE COMPLETING THE ASSESSMENT. CONSIDERING THE FACTS OF THE CASE AND C LAIM OF THE ASSESSEE, THE ISSUE REQUIRES PROPER VERIFICA TION AT THE LEVEL OF ASSESSING OFFICER. ACCORDINGLY THE ASS ESSMENT IS SET-ASIDE, BEING PREJUDICIAL AND ERRONEOUS TO TH E INTEREST OF REVENUE, TO TREAT THE SAID LOSS AS SPEC ULATIVE LOSS AND COMPLETE THE ASSESSMENT ACCORDINGLY THE CHRONOLOGICAL DATES ARE AS UNDER:- 1. PASSING OF ASSESSMENT ORDER U/S 143(3) ON 26.12. 2008 ON TAXABLE INCOME OF RS.2,60,010/- AGAINST DECLARED INCOME OF RS.1,79,730/-. 2. ORDER U/S 263 SETTING ASIDE THE ASSESSMENT ORDE R BY ORDER DT. 25.3.2011 ASSESSEE HUMBLY SUBMITS AND INFORMS THAT HE IS NOT CARRYING ON ANY BUSINESS SPECULATION AND THE WHOLE TRANSACTIONS OF HIS BUSINESS ACTIVITY RELATE TO PURCHASE AND SALE OF GOODS PHYSICALLY I.E . GOODS PURCHASED ARE RECEIVED AND GOODS SOLD ARE DELIVERED AND THERE IS NO SPECULATION. THE ISSUE IS RELATING TO BUSINESS LOSS CLAIMED UNDER HE AD NCDEX LOSS AMOUNTING TO RS. 18,31,590/- WHICH HAS BEEN INFERRED AS SPECULATION LOSS FROM NCDEX. ASSESSEE SUBMITS THE FOLLOWING ADDI TIONAL DOCUMENTS TO PROVE HIS CASE OF PHYSICAL DELIVERY AND HE DENIE S CATEGORICALLY THAT HE HAD INDULGED IN SPECULATION ACTIVITY. THE PAPERS GIV EN HEREUNDER PROVE ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 5 THAT IN PAST ASSESSMENT PRIOR TO A.Y. 2006-07 AND P OST THE ASSESSMENT HE HAS NOT CONDUCTED ANY SPECULATION ACTIVITY:- AFFIDAVIT DT. 15.6.2016 AFFIRMING THAT THE LOSS IS BUSINESS LOSS AND EXPLAINING THE TRADES FROM WHOM THE BUSINES S LOSS WAS SUFFERED. THE AFFIDAVIT ALSO CONTAINS THAT ADDITIONAL EVIDENCE IS BEING PRODUCED TO SHOW THAT T HERE IS BUSINESS LOSS AND NOT SPECULATION LOSS AND THAT TRADING WITH / THROUGH AADATYAS ASSESSEE HAS FIRST REMITTED MONEY TO THE AADATYAS AND THEREAFTER MADE TRADES OF PURCHASE AND SALE TO INCREASE HIS PROFIT BUT HOWEVER HE HAS SUFFERED LOSS. STATEMENT OF TRADE CARRIED OUT WITH FOLLOWING AADATY AS:- I) SALE RECORDED THROUGH AADATYA M/S. VINAYAK COMMODITY PROP. SH. MANISH AGARWAL S/O. SH. SURESH CHAND, ANAJ MANDI, NADBAI LOSS RS.9,72,400/-. II) SALE RECORDED THROUGH ADATYA BANKELAL BRIJ MOHA N DAS PROP. SMT. SUNITA BANSAL - THROUGH MANAGER BRIJ MOHAN DAS, INDIRA GANJ, ANAJ MANDI, DHOLPUR. LOSS OF RS. 8,59,196/-. III) STATEMENT OF TRADING CARRIED OUT WITH THE ABOVE TWO PARTIES MENTIONING THE AMOUNT REMITTED BEFORE CARRYING OUT OF TRADE AND SETTLEMENT OF ACCOUNT. ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 6 IV) STATEMENT OF EACH TRADE CARRIED OUT WITH DATE, QUANTITY PURCHASE AND SOLD AND NET EFFECT I.E. PROF IT OR LOSS. V) COPY OF ASSESSMENT ORDER PASSED U/S 143(3) IN ASSESSEES OWN CASE FOR A.Y. 2012-13 AND 2013-14 WHEREIN ASSESSMENT HAVE BEEN COMPLETED AND THERE IS NO FINDING OF SPECULATION AND FURTHER ASSESSEE I N HIS AFFIDAVIT HAS SWORN THAT HE HAS NEVER CONDUCTED BUSINESS OF SPECULATION. 3. BEING AGGRIEVED BY THE ORDER OF THE LD ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD DISMISSED THE APPEAL FILED BY THE ASSESSEE BY OBSERVING AS UN DER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS SUBMISSIONS MADE BY THE AR OF THE APPELLANT ALONG- WITH THE JUDICIAL CITATIONS GIVEN THEREIN AND FIND T HAT AO HAS DISALLOWED THE CLAIM OF LOSS OF RS. 18,31,596 ON ACCOUNT OF NCDEX LOSS. THE APPELLANT HAD CLAIMED THIS LOSS IN THE PROFIT AND LOSS ACCOUNT. THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS DISALLOWED THE SAME ON THE GROUND THAT UNDER THE PROVISIONS OF SECTION 43(5) OF THE IT ACT, THE LOSS ON NCDEX TRANSACTION IS A SPECULATIVE LOSS AND IS NOT ALLOWAB LE AGAINST THE BUSINESS INCOME. THE AO HAS ALSO STATED THAT LOSS HAS NOT BEEN SUFFERED BY THE APPELLANT IN THE COURSE OF MANUFACTURING OF MERCHANTING BUSINESS TO ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 7 GUARD AGAINST LOSS THROUGH FUTURE PRICE FLUCTUATION S, AS PROVIDED IN THE PROVISO (A) TO SECTION 43(5) OF THE IT ACT. THEREFORE, THE LOSS SUFFERED BY THE APPELLANT IS NOT COVERED IN THE EXCEPTIONS AS PROVIDED IN CLAUSE (A) OF SECTION 43(5) OF THE IT ACT. 4.4 IN THE COURSE OF APPELLATE PROCEEDINGS, IT IS S UBMITTED THAT THE CLAIM OF LOSS MADE BY THE APPELLANT MAY BE ALLOWED AS A BUSINESS LOSS AS THE ASSESSEE IS ENGAGE D IN THE BUSINESS OF AADAT AND TRADING OF FOOD GRAINS, TILHAN AND DALHAN. THE BOOKS OF ACCOUNTS ARE AUDITED AND REGULARLY MAINTAINED. THE LOSS SUFFERED ON ACCOUNT OF TRANSACTIONS CARRIED OUT ON NCDEX WERE IN THE COURSE OF BUSINESS AND HENCE ARE ALLOWABLE. IT I S ALSO STATED IN THE COURSE OF PROCEEDINGS THAT THE PROVISIONS OF SECTION 43(5)(A) OF THE IT ACT ARE APPLICABLE IN THE CASE OF THE APPELLANT. THE ASSESSE E WAS DEALING THROUGH THE AGENTS OF NCDEX I.E. M/S THE PARTIES FOR THE DEALINGS MADE ON THE COMMODITY EXCHANGE HAVE BEEN FILED ALONG-WITH THE DETAILS OF PAYMENTS MADE TO THEM. IT IS SUBMITTED THAT THE SAI D TRANSACTIONS ARE BONAFIDE WITH A VIEW TO GUARD AGAINS T THE FLUCTUATIONS IN COMMODITY PRICES. ALL THE PAYME NTS TO BOTH THE AGENTS OF NCDEX HAVE BEEN MADE MAINLY BY CHEQUE. 4.5 I HAVE CONSIDERED THE SUBMISSIONS MADE AND MATE RIAL AVAILABLE ON RECORD AND FIND THAT APPELLANT HAS NOT BEEN ABLE TO PROVE WHETHER SUCH TRANSACTIONS WERE ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 8 NECESSARY TO HEDGE AGAINST THE CONTRACTS OF DELIVER Y ENTERED INTO BY HIM IN THE REGULAR COURSE OF BUSINE SS AND WERE MEANT FOR ONLY THOSE COMMODITIES. NO MATERIAL HAS BEEN PLACED ON RECORD BY THE APPELLANT IN THIS REGARD EITHER BEFORE THE AO OR IN THE COURS E OF APPELLATE PROCEEDINGS TO SUBSTANTIATE THE CLAIM MAD E. 4.6 THE APPELLANT IN THIS CASE HAS FAILED TO BRING O N RECORD ANY SINGLE INSTANCE WHERE THE DELIVERY OF TH E MATERIAL WAS TAKEN ON ACCOUNT OF TRANSACTIONS CARRIE D OUT AT NCDEX. AS A RESULT OF THE FAILURE TO BRING A NY MATERIAL ON RECORD TO PROVE THE FACT THAT THESE TRANSACTIONS WERE CARRIED OUT IN THE COURSE OF NORMA L BUSINESS ACTIVITY. A MERE GLANCE AT THE COPY OF THE ACCOUNT FURNISHED BY THE APPELLANT CONVEYS THE PUIPOSE THAT THESE TRANSACTIONS WERE MEANT TO MAKE PROFITS OUT OF THE FLUCTUATIONS IN THE PRICES OF COMMODITIES AT NCDEX. NOWHERE THE VOLUME OF LOTS TRADED ON THE NCDEX CARRIES THE IMPRESSION THAT THESE TRANSACTIONS COULD ACTUALLY BE MEANT FOR TAKI NG THE DELIVERY OF GOODS OR TO GUARD AGAINST THE PRICE FLUCTUATIONS WITH REGARD TO THE CONTRACT FOR DELIVER Y OF GOODS WHICH HAVE BEEN ALREADY SECURED IN THE COURSE OF REGULAR BUSINESS. 4.7 THE TRANSACTIONS ENTERED INTO BY THE APPELLANT A RE CLEARLY SPECULATIVE IN NATURE AND FALL WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 43(5) OF THE IT ACT. HAVING CONSIDERED THE SUBMISSIONS MADE BY THE ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 9 APPELLANT, I FIND THAT THE APPELLANT HAS NOT BEEN A BLE TO DISCHARGE THE ONUS WHICH LAY UPON HIM TO PROVE THAT THE TRANSACTIONS WERE INDEED RELATED TO THE BUSINESS ACTIVITIES CARRIED OUT BY THE APPELLANT AN D ARE COVERED UNDER THE PROVISIONS OF CLAUSE (A) OF T HE PROVISO TO SECTION 43(5) OF THE IT ACT. FURTHER, THE CASE LAWS RELIED UPON BY THE APPELLANT ARE CLEARLY DISTINGUISHABLE ON THE FACE OF IT FROM THE FACTS PREVAILING IN THIS CASE. THE SAID CASE LAWS ARE APPLICABLE TO THE DERIVATIVE TRANSACTIONS IN SECURI TIES CARRIED OUT ON A RECOGNIZED STOCK EXCHANGE. IT WOULD BE PERTINENT TO NOTE THAT THE FIRST RECOGNITION TO A COMMODITY EXCHANGE WAS GIVEN ONLY ON 22-05-2009 VIDE NOTIFICATION NO. 46/2009 BY THE CBDT AND THAT TOO WAS GIVEN TO MCX. THIS IS ALSO CLEAR FROM THE AMENDMENT MADE IN PROVISO (D) TO SECTION 43(5) OF THE IT ACT BY THE FINANCE ACT, 2005. 4.8 THEREFORE, THE TRANSACTIONS CARRIED OUT BY THE APPELLANT ON NCDEX ARE NOT ELIGIBLE TRANSACTIONS FO R THE PURPOSES OF CLAIM OF LOSS AS THE EXCHANGE IS NO T RECOGNIZED BY THE CBDT. BEFORE THIS NOTIFICATION, ON LY TWO EXCHANGES I.E. NSE AND BSE WERE CONSIDERED AS RECOGNIZED STOCK EXCHANGE (VIDE NOTIFICATION NO. SO - 89(E) DATED 25-01-2006) FOR THE PURPOSES OF SECTION 43(5) OF THE IT ACT. WITH THIS NOTIFICATION DATED 22 - 05-2009, WHICH INCLUDES ONLY DERIVATIVE CONTRACTS FO R COMMODITIES CARRIED OUT AT MCX, IT IS CLARIFIED THA T ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 10 ONLY TRANSACTIONS WITH REGARD TO THE COMMODITIES ON THIS EXCHANGE WILL NOT BE TREATED AS SPECULATIVE TRANSACTIONS PROVIDED OTHER CONDITIONS AS PROVIDED IN THE PROVISO TO SECTION 43(5) OF THE IT ACT ARE SATISFIED. THEREFORE, THE TRANSACTIONS CARRIED OUT AT NCDEX WILL BE STILL TREATED AS SPECULATIVE AND THEREFORE CANNOT BE COVERED UNDER THE EXCEPTIONS AS PROVIDED IN THE PROVISO TO SECTION 43(5) OF THE IT A CT. 4.9 IN VIEW OF THE ABOVE DISCUSSION, I UPHOLD THE AC TION OF THE AO IN DISALLOWING THE CLAIM OF LOSS OF RS. 18,31,596 ON ACCOUNT OF TRANSACTIONS CARRIED OUT BY THE APPELLANT AT NCDEX. ACCORDINGLY, I CONFIRM THE ADDITION OF RS. 18,31,596 MADE BY THE AO UNDER THIS HEAD. 4. NOW THE ASSESSEE IS APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS FILED AN AFFIDA VIT BEFORE US DATED 15/6/2016 WHEREIN, IT HAS BEEN SUBMITTED AS UNDER:- 4. THAT I DECLARE THAT I HAVE CARRIED OUT PURCHASE AND SALE OF GRAIN AND PULSES AND OTHER AGRICULTURE ITEM S FOR WHICH PHYSICAL DELIVERY OF GOODS HAS BEEN TAKEN OR GIVEN AND FURTHER I DECLARE THAT I AM NOT A MEMBER OF ANY COMMODITY EXCHANGE. THAT MY ACCOUNTANT IN TRADE CARRIED OUT WITH FOLLOWING HAS RECORDED LOSS OF RS. 18,31,596/- AS LOSS FROM NCDEX WHICH IS AN ERROR:- ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 11 I) SALE RECORDED THROUGH AADATYA M/S. VINAYAK COMMODITY PROP. SH. MANISH AGARWAL S/O. SH. SURESH CHAND, ANAJ MANDI, NADBAI LOSS RS.9,72,400/-. II) SALE RECORDED THROUGH ADATYA BANKELAL BRIJ MOHAN DAS PROP. SMT. SUNITA BANSAL - THROUGH MANAGER BRIJ MOHAN DAS, INDIRA GANJ, ANAJ MANDI, DHOLPUR. LOSS OF RS.8,59,196/-. I DECLARE AND AFFIRM THAT AMOUNT APPEARING IN STATEMENT APPENDED WITH THIS AFFIDAVIT WAS FIRST SEN T BY CHEQUE/DRAFT TO CARRY OUT TRADE. THAT THERE WAS SETTLEMENT OF ACCOUNT AND LOSS HAS BEEN BORNE BY ME. THAT ABOVE TRADES ARE PHYSICAL TRADE CARRIED OUT THROUGH AADATYA FOR WHICH STATEMENT IS ATTACHED WITH THIS AFFIDAVIT. THAT I HUMBLY SUBMIT THAT THE TRADE CARRIED OUT BY ME THROUGH AADATYA IS PHYSICAL TRADE AND NOT SPECULATION AND MY ACCOUNTANT HAS ENTERED NOMENCLATURE AS NCDEX LOSS IN PROFIT & LOSS ACCOUNT AMOUNTING TO TOTAL RS. 18,31,596/- AND THAT MY COUNSEL APPEARING BEFORE ID. AO AS WELL AS ID. CIT, ALWAR WERE NOT ABLE TO PRESENT THE ABOVE FACT. 5. I FURTHER DECLARE THAT I HAVE NEVER CARRIED OUT SPECULATION BUSINESS BEFORE THE A.Y. 2006-07 OR IN A.Y. 2006-07 OR IN ANY ASSESSMENT YEAR AFTER A.Y. 2006- 07. THAT MY ASSESSMENT OF INCOME FOR A.Y. 2011-12, 2012-13 AND 2013-14 WERE COMPLETED AFTER ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 12 DISCUSSION U/S 143(3) AND THERE IS NO FINDING OF AN Y SPECULATION BUSINESS ETC.. 6. THAT THE LOSS WHICH HAS OCCURRED IS ON ACCOUNT OF DOING TRADE WITH AADATYA NAMED IN S. NO 4 ABOVE FOR WHICH I HAVE ENCLOSED STATEMENT OF THE TRADE AND SUBSEQUENT LOSS. 7. THAT DUE TO MY ACCOUNTANT AND LOCAL CHARTERED ACCOUNTANT/ COUNSEL NOT UNDERSTANDING THE NATURE OF TRADE OF AADATYA HAVE DESCRIBED THE SAME AS NCDEX LOSS AND THE TRADE CARRIED OUT THROUGH THE TWO AADATYAS WHOSE NAME IS GIVEN IN S. NO. 4 ABOVE. THAT DUE TO THE ACCOUNTANT AND LOCAL CHARTERED ACCOUNTANT NOT UNDERSTANDING THE TRADE PARLANCE OF AADATYA TRADE THE TRADE DETAIL WERE NOT PRODUCED BEFORE ID. CIT, ALWAR AND DUE TO THEY ARE NOT BEING BEFORE HIM ID. CIT HAS NOTED THE FINDING WHICH APPEARS AT S. NO. 3 ABOVE. THAT IT IS HUMBLY PRAYED THAT THE ADDITIONAL EVIDENCE WHICH COULD NOT BE PRESENTED BEFORE ID. CIT MAY BE ALLOWED TO BE FURNISHED IN THE PROCEEDINGS AS THE DETAIL OF TRADE OF AADATYA WILL PROVE THAT PHYSICAL DELIVERY BUSINESS H AS TAKEN PLACE. 4.1 THE ASSESSEE HAS ALSO PRODUCED BILLS OF PURCHASE AND SALE OF THE AGRICULTURAL PRODUCE ON THE BASIS OF WHICH, THE ASS ESSEE IS CLAIMED LOSS ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 13 OF RS. 18,31,596/-. IT IS CASE OF THE ASSESSEE THAT THESE BILLS WERE PRODUCED BEFORE THE LD ASSESSING OFFICER DURING THE COURSE OF FIRST ORIGINAL ASSESSMENT. HOWEVER, THE LD ASSESSING OFFIC ER HAS NOT CONSIDERED IT APPROPRIATE TO BE KEPT ON RECORD. HOWE VER, THE LD AR HAS SUBMITTED THAT DURING THE REVISION PROCEEDINGS, THE SE BILLS WERE NOT PRODUCED AS RECORDED BY THE LD CIT(A). THIS BILLS WER E IN EXISTENCE AND THESE BILLS CAN BE VERIFIED BY THE ASSESSING OFFICE R BY ISSUING APPROPRIATE NOTICE TO M/S VINAYAK COMMOTIRY AND SHR I BANKELAL BRIJMOHAN DAS. IT WAS LASTLY CONTENDED THAT BEFORE P URCHASE OF COMMODITIES THROUGH THESE BILLS, THE ADVANCE CHEQU ES WERE ISSUED BY THE ASSESSEE FOR PURCHASE OF AGRICULTURAL PRODUCE. THE SUM TOTAL OF THE SUBMISSIONS OF THE ASSESSEE BEFORE US WAS THAT THE ORDER PASSED BY THE LD ASSESSING OFFICER DENYING THE ADJUSTMENT OF LOSS OF RS. 18,31,596/- WAS ON ACCOUNT OF HIS SPECULATION LOSS HOWEVER, THESE LOSSES WERE NOT ON ACCOUNT OF SPECULATION LOSS BUT WERE PART OF ACTI VITIES CONNECTED BY THE ASSESSEE BUSINESS AND THE LOSSES WERE PART AND P ARCEL OF THE BUSINESS ACTIVITIES. THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN SALE AND PURCHASE OF GRAINS AND AGRICULTURAL PRODUCE, TH EREFORE, THESE TYPES OF ACTIVITIES WHEREBY THE PRODUCTS ARE BEING STORED AND SOLD THEREAFTER, ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 14 IS A REGULAR BUSINESS ACTIVITIES AND THEREFORE, THE LOSSES ON ACCOUNT OF THE DIFFERENCES IN RATES, ARE A BUSINESS LOSS. 5. AT THE OUTSET, THE LD CIT DR HAS SUBMITTED THAT THESE LOSSES ARE NOT THE BUSINESS LOSSES AND ARE SPECULATIVE LOSSES AND THE LOSSES ARE NOT CONNECTED WITH THE BUSINESS ACTIVITIES OF THE AS SESSEE. THEREFORE, LOSSES ARE NOT PERMITTED TO BE SET OFF U/S 72 OF TH E ACT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN OU R VIEW, THE WHOLE CONTROVERSY REVOLVES AROUND THE FACT WHETHER THE LOS SES, CAUSED ON ACCOUNT OF SALE AND PURCHASE OF THE ARTICLES/GOODS /COMMODITIES IS PART OF THE BUSINESS ACTIVIEW OR IS IN SPECULATIVE BUSINE SS NOT RELATABLE TO THE ACTIVITIES OF THE BUSINESS OF THE ASSESSEE. THE ASSE SSEE HAS PRODUCED THE DETAILS OF PURCHASES OF THE COMMODITIES, HAS AL SO PRODUCED BILLS OF SALE OF THE COMMODITY. ALL THESE BILLS WERE SHOWS THA T THE ACTUAL DELIVERY OF THE GOODS WAS GIVEN AT THE TIME OF PURCH ASE OF COMMODITY, THEREFORE, TO ARRIVE AT THE CONCLUSION, THE LD ASSE SSING OFFICER WAS REQUIRED TO EXAMINE THESE ASPECTS AND THE OBSERVATI ON OF THE LD ASSESSING OFFICER THAT THE ASSESSEE HAS NOT RECEIV ED THE PHYSICAL DELIVERY OF THE COMMODITIES AND THEREFORE, THE WHOLE TRANSACTION IS ITA 446/JP/2014_ LAXMAN DAS BANSAL VS ITO 15 SPECULATIVE LOSS, IN OUR VIEW IS REQUIRED TO BE REV ISITED/EXAMINED BY THE LD ASSESSING OFFICER. IN LIGHT OF ABOVE, WE DEEM IT APPROPRIATE TO REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFI CER WITH DIRECTION TO CONSIDER THE AFFIDAVIT AND THE ACCOMPANY DOCUMENTS INCLUDING BILLS ISSUED BY THE M/S VINAYAK COMMOTIRY AND SHRI BANKEL AL BRIJMOHAN DAS AND OTHER DOCUMENTS. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 20/06/2016. SD/- SD/- HKKXPAN YFYR DQEKJ (BHAGCHAND) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 20 TH JUNE, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI LAXMAN DASS BANSAL, DHOLPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-3, BHARATPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 446/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR