Manoj Jain HUF, Kolkata V. ITO, Ward - 35(4), Kolkata , Kolkata

ITA 580/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1857 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 03-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SITAL CHANDRA DAS
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER) ITA NO. 580/KOL/2018 ASSESSMENT YEAR: 2014-15 MANOJ JAIN HUF...................... APPELLANT 15B, CLIVE ROW KOLKATA 700 001 [PAN : AAJHM 3349 B] VS. INCOME TAX OFFICER, WARD-35(4) KOLKATA.................................. RESPONDENT APPEARANCES BY: SHRI MIRAJ D. SHAH, A/R, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SITAL CHANDRA DAS, ADDL. CIT, SR. D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : AUGUST 28 TH , 2018 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 7 TH , 2018 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 10 KOLKATA, (HEREINAFTER THE LD. CIT(A)), DT. 28/02/2018, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS A HUF AND HAS DECLARED INCOME FROM OTHER SOURCES. DURING THE YEAR, THE ASSESSEE HAD DECLARED COMMODITY PROFIT OF RS.1,48,588.77/-, AS ON 01/03/2014. THE TRANSACTIONS IN QUESTION WERE EXECUTED BETWEEN 01/03/2014 AND 07/03/2014. THE ASSESSING OFFICER RECORDS THAT M/S. KALI COMMODITIES PVT. LTD., WAS THE BROKER THROUGH WHICH THE ASSESSEE HAD CLAIMED TO HAVE CARRIED OUT THE ABOVE SAID TRANSACTIONS AND THAT M/S. KALI COMMODITIES PVT. LTD., WAS EXPELLED FROM THE TRADING ON THE EXCHANGE PLATFORM ON 20/03/2015. THE ASSESSING OFFICER ALSO WROTE TO THE MULTI COMMODITY EXCHANGE OF INDIA (MCX) ON 08/09/2016, TO VERIFY THE GENUINENESS OF THE TRANSACTIONS. MCX REPLIED ON 29/09/2016 THAT NO CLIENT WAS REGISTERED WITH THE NAME MANOJ JAIN HUF. THUS, THE ASSESSING OFFICER DIS-BELIEVED THE TRANSACTIONS AND TAXED THE INCOME OFFERED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES, AS 2 ITA NO. 580/KOL/2018 ASSESSMENT YEAR: 2014-15 MANOJ JAIN HUF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND LEVIED TAX U/S 115BBE @ 30%. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL WITHOUT SUCCESS. 3. FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THE TRANSACTIONS IN QUESTION ARE ADMITTEDLY, OFF MARKET TRANSACTIONS AND HENCE WOULD NOT BE AVAILABLE ON THE EXCHANGE PLATFORM OF MCX. HE RELIED ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-VS- CARBO INDUSTRIAL HOLDINGS LTD (244 ITR 422) , FOR THE PROPOSITION THAT OFF MARKET TRANSACTIONS ARE LEGAL TRANSACTIONS AND CAN BE DONE BY THE ASSESSEE. HE FURTHER RELIED ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS EMERALD COMMERCIAL LTD. AND ANR.2001 250 ITR 539 CAL AND SUBMITTED THAT THE ASSESSING OFFICER COULD NOT HAVE DISALLOWED THE LOSS WITHOUT ANY ENQUIRY WHEN THE FACTS WAS THAT, THE ASSESSEE HAD CARRIED OUT THE TRANSACTIONS THROUGH ACCOUNT PAYEE CHEQUES AND ALSO FILED ALL THE NECESSARY EVIDENCES SUCH AS CONTRACT NOTES ETC. AS EVIDENCE BEFORE THE ASSESSING OFFICER. HE POINTED OUT THAT THE TRANSACTIONS HAVE TAKEN PLACE LONG BEFORE THE BROKER WAS SUSPENDED FROM TRADING ON THE MCX. 4.1. THE LD. D/R, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT THE TRANSACTIONS IN QUESTION WERE NEVER REFLECTED ON THE EXCHANGE PLATFORM OF MCX AND HENCE THE ORDER OF THE ASSESSING OFFICER AS UPHELD BY THE LD. CIT(A) SHOULD BE UPHELD. 5. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS:- 5.1. THE SOLE ISSUE THAT ARISES FOR OUR ADJUDICATION IS THE RATE OF TAXABILITY OF THIS AMOUNT OF RS.1,48,588/-. THE ASSESSEE HAS DECLARED THE SAME AS PROFIT FROM DERIVATIVE TRANSACTIONS AND FURNISHED SUPPORTING DOCUMENTS BY WAY OF CONTRACT NOTES AND BANK PAYMENT DETAILS. THE ASSESSING OFFICER HAS NOT CONDUCTED ANY INVESTIGATION TO DISPROVE THE CLAIMS MADE BY THE ASSESSEE THAT THESE ARE OFF MARKET TRANSACTIONS. THE BROKER M/S. KALI COMMODITIES PVT. LTD., HAS NOT BEEN QUESTIONED. THE TRANSACTIONS IN QUESTION WERE CARRIED OUT BETWEEN 01/03/2014 TO 07/03/2014 AND 3 ITA NO. 580/KOL/2018 ASSESSMENT YEAR: 2014-15 MANOJ JAIN HUF WHEREAS M/S. KALI COMMODITIES PVT. LTD., WAS EXPELLED ON 20/03/2015 I.E. AFTER ONE YEAR. ALL THE TRANSACTIONS WERE CONFIRMED. OFF MARKET VALUE TRANSACTIONS ARE LEGALLY VALID. WITHOUT CONDUCTING PROPER ENQUIRY, THE CHARACTER OF THE TRANSACTIONS CANNOT BE CHANGED. THUS, WE UPHOLD THIS CONTENTION OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO TAX THESE PROFITS ONLY AS PROFITS FROM DERIVATIVE TRANSACTIONS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 7 TH DAY OF SEPTEMBER, 2018. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 07.09.2018 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. MANOJ JAIN HUF 15B, CLIVE ROW KOLKATA 700 001 2. INCOME TAX OFFICER, WARD-35(4) KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES