YUNAS CHOPDAR, JAIPUR V. INCOME TAX OFFICER, WARD-4-3, JAIPUR

ITA 864/JPR/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3667 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHARMA CIT DHK
• Keywords: Unexplained investment; Transactions in derivatives
• Section: 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 864/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. SHRI YUNAS CHOPDAR 25, DADABARI COLONY, SIKAR ROAD, BEHIND ALKA CINEMA, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 4(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AHUPC 7335 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) JKTLO DH VKSJ LS@ REVENUE BY : SHRI ABHISHEK SHARMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01.10.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/10/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 28.01.2019 OF LD. CIT (APPEALS)-2, JAIPUR FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT (APPEALS) HAS ERRED IN NOT CONSIDE RING THE SAVINGS/INCOME EARNED OF RS. 1,57,370/- SOURCED TOW ARDS LOSS INCURRED IN COMMODITY TRADE OF RS. 1,53,430/- DURIN G THE AY 2010-11 AND CONFIRMED THE ADDITIONS MADE BY THE AO SOLELY ON THE BASIS OF SURMISES. THE FACTUAL POSITION THAT TH E CASE WAS OPENED ON THE BASIS OF AIR INFORMATION AND PROCEEDI NGS U/S 147 WERE INITIATED, BUT DUE TO ASSESSEES ILLITERACY IN TAXATION AND NOT ATTENDING CASE PROPERLY IS ALSO ONE OF THE MAIN REASONS OF SUCH ADVERSE ORDER. 2. THE APPELLANT CRAVES TO ADD, AMEND, ALTER ANY OT HER GROUNDS OR GROUNDS OF APPEAL AT THE TIME OF HEARING OF APPEAL. 2 ITA NO. 864/JP/2019 SHRI YUNAS CHOPDAR, JAIPUR. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THIS APPEAL WAS CALLED FOR HEARING. HOWEVER, THE ASSESSEE HAS FILED THE WRITTE N SUBMISSIONS. ACCORDINGLY THE APPEAL OF THE ASSESSEE WAS TAKEN UP FOR HEARING AND ADJUDICATION EX PARTE. 3. THE AO HAS REOPENED THE ASSESSMENT BY ISSUING NO TICE UNDER SECTION 148 OF THE ACT ON 30 TH MARCH, 2017 ON THE GROUND THAT THE ASSESSEE RECEIV ED COMMISSION INCOME WHICH WAS NOT OFFERED TO TAX. IN THE ASSESSM ENT ORDER PASSED UNDER SECTION 147/144 OF THE ACT, THE AO MADE THE ADDITION ON ACC OUNT OF UNEXPLAINED INVESTMENT IN THE BUSINESS DONE ON THE MCX AS WELL AS THE COMM ISSION INCOME TOTAL AMOUNTING TO RS. 3,08,800/-. THE ASSESSEE CHALLENGED THE ACT ION OF THE AO BEFORE THE LD. CIT (A) AND SUBMITTED THAT WHEN THERE WAS A LOSS OF RS. 1,51,430/- IN RESPECT OF THE TRANSACTIONS CARRIED OUT ON THE MCX AND AT THE SAME TIME THE ASSESSEE HAS RECEIVED COMMISSION INCOME OF RS. 1,57,370/-, THEN THE SAID LOSS INCURRED BY THE ASSESSEE IS SOURCED FROM THE COMMISSION INCOME OF THE ASSESSEE. THE LD. CIT (A) DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE AND CONFIRMED THE A DDITION MADE BY THE AO. 4. IN THE WRITTEN SUBMISSIONS, THE ASSESSEE HAS SUB MITTED AS UNDER : THE FACT THAT THE ASSESSEE HAS MADE SOME COMMODI TY TRADES AND INCURRED LOSS OF RS. 1,51,430/-, WHICH IS NOWHERE DISPUTED. THE ASSESSEE THOUGH WAS NOT AWARE OF NATURE/OUTCOME OF INCOME T4AX PROCEEDING, HAD DURING HIS VISIT INFORMALLY ON 28.12.2017 HAS INFORMED THAT HE HAS APPROXIMATEL Y EARNED COMMISSION INCOME OF RS. 96,000/-. THE AO HIMSELF CONSIDERING HIS REP LY AND INFORMATION AVAILABLE WITH HIM HAS TAKEN COMMISSION INCOME OF RS. 1,57,370/-. DURING APPELLATE PROCEEDINGS, ORDER BEING PASSED BY LD. CIT (A) PENDING LINKAGE O F SOURCE WITHOUT GIVING ANY OPPORTUNITY. THE ASSESSEE SOUGHT DETAILS FROM THE L D. AO VIDE LETTER DATED 3 ITA NO. 864/JP/2019 SHRI YUNAS CHOPDAR, JAIPUR. 12.06.2019 IN RESPECT OF LOSS OF COMMODITY TRADE HA S ALSO NOT BEEN MADE AVAILABLE SO FAR. HOWEVER, AS EXPLAINED BY THE ASSESSEE ON TH E BASIS OF INFORMATION AND BANK STATEMENT POSSESSED WITH HIM AND TRADE BEING UNDERT AKEN SINCE AUG2009, THE COMMODITY LOSS OF RS. 1,51,430/- IS SOURCED THROUGH RS. 1,00,000/- REALIZED IN BANK ON 27 TH AUG 2009 TOWARDS COMMISSION INCOME OF RS. 96,000/- & RS. 4,000/- OUT OF POCKET EXP. AND BALANCE THROUGH CASH OUT OF SAVINGS AND SMALL LOANS BEING DEPOSIT IN BANK A/C EVIDENCING FROM THE COPY OF BANK EXTRAC TS ANNEXED HEREWITH. FURTHER, THE LD. AO WHILE MAKING ADDITION HAS TAKE N THE INCOME 0 INSTEAD OF TAKING THE FIGURE OF LOSS IN COMMODITY TRADE, AS AS SESSED BY HIM AS APPARENT FROM THE ORDER AND THIS IS RESULTING INTO EXCESS ADDITIO N OF RS. 1,51,430/-, WHICH ALSO REQUIRED TO RECTIFY. 5. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD THE LD. D/R AND CONSIDERED THE WRIT TEN SUBMISSIONS FILED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE AO HAS CARRIED OUT THE INVESTIGATION AND VERIFICATION BY CALLING THE INFORMATION FROM MCX AN D AS PER THE STATEMENT RECEIVED FROM THE MCX, IT WAS FOUND THAT THE ASSESSEE HAS IN CURRED A LOSS OF RS. 1,51,430/- IN RESPECT OF THE TRANSACTIONS CARRIED OUT BY THE ASSE SSEE THROUGH MCX. FURTHER AS PER THE ITS DETAILS AVAILABLE WITH THE AO, IT WAS NOTIC ED THAT THE ASSESSEE WAS IN RECEIPT OF COMMISSION INCOME FROM M/S. AGARWAL COMMODITIES AND BONANZA COMMODITY BROKERS PVT. LTD. OF RS. 61,370/- AND COMMISSION IN COME FROM ICICI SECURITIES OF RS. 96,000/- TOTAL AMOUNTING TO RS. 1,57,370/-. THE AO MADE THE ADDITION OF BOTH THESE AMOUNTS ONE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE COMMODITY AND ANOTHER ON ACCOUNT OF COMMISSION INCOME. THE LD. CIT (A) HA S CONFIRMED THIS ADDITION ON THE 4 ITA NO. 864/JP/2019 SHRI YUNAS CHOPDAR, JAIPUR. GROUND THAT THE ASSESSEE HAS FAILED TO ESTABLISH TH E DIRECT NEXUS BETWEEN THE COMMISSION INCOME AND THE LOSS INCURRED. ONCE THE AO HIMSELF HAS VERIFIED THE FACT AND FOUND THAT THE ASSESSEE HAS RECEIVED THE COMMIS SION INCOME ON ONE HAND AND THERE IS A LOSS IN THE COMMODITY TRANSACTIONS THROU GH MCX, THEN BOTH STAND EXPLAINED BEING THE INCOME ON ACCOUNT OF COMMISSION IS AN EXPLAINED SOURCE FOR THE LOSS INCURRED BY THE ASSESSEE IN THE TRANSACTIONS O N MCX. ACCORDINGLY THE SAID FACT WHICH THE AO HIMSELF HAS BROUGHT ON RECORD CANNOT B E IGNORED WHILE ASSESSING THE INCOME OF THE ASSESSEE. ACCORDINGLY, WHEN THE LOSS INCURRED BY THE ASSESSEE IN THE COMMODITY EXCHANGE AND WHICH IS IN THE NATURE OF SP ECULATIVE, THEN THE SAME IS ELIGIBLE FOR SETTING OFF AGAINST THE COMMISSION INC OME. THE ADDITION MADE BY THE AO IS ACCORDINGLY DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29/10/20 19. SD/- ( FOT; IKY JKWO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/10/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI YUNAS CHOPDAR, JAIPUR. 2. THE RESPONDENT THE ITO WARD 4 (3) JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 864/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 864/JP/2019 SHRI YUNAS CHOPDAR, JAIPUR.