LEELA DEVI BUMB, Ajmer V. ITO, BEAWAR

ITA 909/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1829 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEENA JAIF JCIT DHK
• Assessee Lawyers: SUBHASH PORWAL
• Keywords: Unexplained investment; Speculation loss; Corroborative evidences
• Section: 131; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 909/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. SMT. LEELA DEVI BUMB, 117, SHITAL MATA MARKET, KUMHAR MOHALLA, BIJAINAGAR CUKE VS. INCOME TAX OFFICER WARD-1, BEAWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AIJPB 0894 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SUBHASH PORWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JAIF (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.12.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08/12/2017. VKNS'K@ ORDER PER SHRI BHAGCHAND, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) AJMER, DATED 29.09.2016 PERTAINING TO THE ASSESSMENT YEAR 2012-13. THE RETURN OF INCOME FILED ON 25.12.2013 DECLARED INCOME AT RS. 1,82,390 /-. THE ASSESSEE HAD ENTERED INTO COMMODITY EXCHANGE TRANSACTIONS TOTALING TO RS . 7,38,08,37,087/- IN NAME OF ASSESSEE AND PANKAJ TRADERS PROP. OF ASSESSEE (LEEL A DEVI BUMB). ASSESSEE HAD NOT DISCLOSED THESE TRANSACTIONS IN HER RETURN OF I NCOME. ASSESSEE HAD ALSO DEPOSITED CASE OF RS. 56,30,000/- IN HERE BANK A/C HELD WITH SBBJ BIJAINAGAR. AO MADE ADDITION OF RS. 56,30,000/- AND CIT(A) HAD CON FIRMED THE ADDITIONS. NOW, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL THAT READS AS UNDER:- 2 ITA NO. 909/JP/2016. SMT. LEELA DEVI BUMB. UNDER THE FACTS & CIRCUMSTANCES OF CASE THE LD. CI T(A) HAS ERRED IN:- 1. THAT THE LD. CIT(A) HAS ERRED IN CONSIDERING THE BUSINESS/ TRADING OF M/S PANKAJ TRADER AS OF ASSESSEE THOUGH ASSESSEE IS ONLY SUB- BROKER IN MCDX/ NCDX. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 56,30,000/- U/S 69. 3. THAT FURTHER LD. CIT(A) HAS ERRED IN NON GRANTIN G THE SET OFF OF LOSS OF RS. 55,69,500.00 TO ADDITION U/S 69 OF RS. 56,30,000.00. 4. ANY OTHER MATTER WITH THE PRIOR PERMISSION OF CH AIR. 2. WE HAVE HEARD BOTH THE SIDES. WE HAVE CONSIDERE D THE RELEVANT CASE LAWS RELIED UPON AND ALSO THE VARIOUS FACTS AVAILABLE ON THE RECORDS. 3. IT IS CLAIMED BY LD. AR THAT THE ASSESSEES MAIN SOURCE OF INCOME IS COMMISSION AND BROKERAGE AND INTEREST INCOME. IT I S ALSO CLAIMED THAT THE ASSESSEE WAS SUB-BROKER OF MCDX/NCDX IN THE NAME OF M/S PANK AJ TRADERS AS PROP. IT WAS ALSO CLAIMED THAT THE MAIN BROKER WAS M/S SISHODIYA FUTURE, AJMER. SHE HAS ALSO CLAIMED THAT ASSESSEE WAS TAKING REASONABLE MARGINS FROM ITS CUSTOMERS IN CASH AND USED TO ALLOW THESE CLIENTS TO BOOK THE TRANSACTION FOR OPERATION. IN CASE OF LOSS/PROFIT ON SUCH OPERATIONS, THE LOSS/ PROFIT WE RE DEBITED/CREDITED TO THE ACCOUNT OF SAID PERSON AGAINST MARGINS WHICH ARE SETTLED IN CASH. IT IS ALSO CLAIMED THAT THE MAXIMUM PARTIES HAVE SUFFERED LOSS AND ASSESSEE WAS WORKING ONLY A SUB-BROKERS. THE RELEVANT DOCUMENT HAS BEEN TORNED OFF DUE TO LO SS. IT IS PERTINENT TO NOTE THAT 3 ITA NO. 909/JP/2016. SMT. LEELA DEVI BUMB. THERE IS NO RELIABLE EVIDENCE/DOCUMENTS WHICH COULD ESTABLISH THAT THE ASSESSEE WAS WORKING AS SUB-BROKER ON BEHALF OF THE CERTAIN CLIE NTS FROM WHOM SHE CLAIMED TO HAVE RECEIVED THE CASH TO SETTLE THE MARGINS. IT I S ALSO PERTINENT TO NOTE THAT NO BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER EVEN IN THE REMAND PROCEEDINGS. THE LD. A/R HAS RELIED ON THE SUBMISSI ONS MADE BEFORE THE LOWER AUTHORITIES AND REITERATED THAT THE ASSESSEE WAS A SUB-BROKER AND THE MARGINS WERE RECEIVED IN CASH FROM CLIENTS WHICH WERE DEPOSITED IN THE BANK ACCOUNTS. THE ASSESSEE HAS NOT OPENED ANY CLIENTS ACCOUNTS, AS PER THE DIRECTION/GUIDANCE OF SEBI. THE PERSONS WHO WERE EXAMINED BY THE INCOME TAX AUTHORITIES WERE ALSO FAILED TO PRODUCE ANY SUPPORTING EVIDENCE WITH REGA RD TO THE TRANSACTIONS CLAIMED TO HAVE BEEN DONE THROUGH THE ASSESSEE AS SUB-BROKERS. IT IS ALSO A PERTINENT TO NOTE THAT ALL PERSONS DENIED HAVING ANY BANK ACCOUNT, PA N NO., EXCEPT SHRI PRAKASH BUMB WHO IS HUSBAND OF THE ASSESSEE. IT IS ALSO PER TINENT TO NOTE THAT NO BILLS WERE ISSUED TO THE CLIENTS FOR COMMODITIES TRANSACTIONS. IN THE STATEMENT RECORDED SMT. LEELA DEVI HAS CATEGORICALLY STATED THAT SHE IS NOT HAVING ANY BILLS OR ANY DOCUMENTARY EVIDENCE IN SUPPORT OF CLAIM THAT THE T RANSACTION HAS BEEN DONE ON BEHALF OF THE CLIENTS. THE RECEIPTS FOR CASH CLAIM S TO HAVE BEEN RECEIVED FROM CLIENTS WERE ALSO NOT PRODUCED. IN HER STATEMENT SHE HAD C ATEGORICALLY DENIED REGARDING EXISTENCE OF ANY SUCH RECEIPTS. IT IS ALSO PERTINE NT TO NOTE THAT NO BILLS/DOCUMENTS FROM M/S SHISHODIYA FUTURES THE MAIN BROKER WERE PR ODUCED. SHE HAS SIMPLY STATED THAT SHE HAS TORNED OFF THE DOCUMENTS DUE TO LOSS. THUS, THERE IS NOTHING ON RECORD 4 ITA NO. 909/JP/2016. SMT. LEELA DEVI BUMB. WHICH COULD SUBSTANTIATE THE CLAIM OF ASSESSEE THAT SHE WAS DOING SUB-BROKERS AND THE CASE DEPOSITED IN BANK PERTAIN TO THE CLIENTS. THE LD. CIT(A) HAS DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STAT EMENT OF FACTS, GROUNDS OF APPEAL, WRITTEN SUBMISSION, REMAND REPORT AND RE JOINDER CAREFULLY. IT IS SEEN THAT EITHER DURING THE COURSE OF ASSESSMENT PR OCEEDINGS OR REMAND PROCEEDINGS, THE APPELLANT HAS NOT BEEN ABLE TO SUB STANTIATE WITH DOCUMENTARY EVIDENCE, THE NATURE AND SOURCE OF THE CASH DEPOSITS OF RS. 56,30,000/- MADE IN THE BANK ACCOUNT OF THE APPELLA NT. THOUGH THE APPELLANT CLAIMED THAT THE SOURCE OF CASH DEPOSITS WAS THE PE RSONS ON WHOSE BEHALF SHE HAD CARRIED OUT TRANSACTIONS AT NCDX AND MCX BU T THE APPELLANT FAILED TO PROVE HER CONTENTION WITH THE HELP OF ANY DOCUMENTA RY EVIDENCE. THEREFORE, THE ACTION OF THE AO TREATING THE ENTIRE CASH DEPOS ITS OF RS. 56,30,000/- AS UNEXPLAINED INVESTMENT OF THE APPELLANT IS HELD TO BE FULLY JUSTIFIED AND IN ACCORDANCE WITH THE PROVISIONS OF LAW. THE APPELLANT HAS ALSO ARGUED THAT LOSS OF RS. 55,6 9,580/- INCURRED BY THE APPELLANT ON TRANSACTIONS CARRIED OUT THROUGH NCDX AND MCX SHOULD BE ALLOWED AGAINST THE ADDITION OF RS. 56,30,000/- MAD E BY THE AO U/S 69. I HAVE CONSIDERED THIS ARGUMENT OF APPELLANT CAREFULL Y. IT IS AN UNDISPUTED FACT THAT LOSS OF RS. 55,69,580/- IS A LOSS SUSTAINED IN A SPECULATION BUSINESS. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE SET -OFF OF THIS LOSS CANNOT, BE ALLOWED AGAINST THE INCOME OF RS. 56,30,000/- TAXED U/S 69 BECAUSE SECTION 73(1) CLEARLY PROVIDES THAT 'ANY LOSS, COMPUTED IN RESPECT SPECULATION BUSINESS CARRIED ON BY THE ASSESSEE, SHALL NOT BE S ET OFF EXCEPT AGAINST PROFITS AND GAINS, IF ANY, OF ANOTHER SPECULATION BUSINESS . AS THE, INCOME OF RS. 56,30,000/- TAXED BY THE AO U/S 69 IS NOT A PROFIT FROM SPECULATION BUSINESS CARRIED ON BY THE APPELLANT, THEREFORE, IT IS HELD THAT NO SET-OFF OF THE LOSS OF RS. 55,69,580/- INCURRED BY THE APPELLANT ON SPECUL ATIVE COMMODITY 5 ITA NO. 909/JP/2016. SMT. LEELA DEVI BUMB. TRANSACTIONS CARRIED OUT TROUGH NCDX AND MCX IS ADM ISSIBLE TO THE APPELLANT AGAINST THE INCOME OF RS. 56,30,000/-. EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS, THE ASSESSEE HAS NOT BEEN ABLE TO PROD UCE ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE TRANSACTIONS CARRIED OUT IN THE ID AND ACCOUNT OF THE APPELLANT THROUGH NCDX AND MCX WERE CARRIED OUT BY HER ON BEHALF OF SOME OTHER PERSONS. FROM THE STATEMENT OF TRANSACTI ON PROVIDED BY M/S SISODIYA FUTURES, AJMER AND THE STATEMENT OF SMT. S USHILA SISODIA, PARTNER OF M/S SISODIYA FUTURES RECORDED U/S 131 BY THE AO ON 13.03.2015, IT IS CLEAR THAT ALL THE TRANSACTIONS WERE CARRIED OUT BY THE A PPELLANT HERSELF. THEREFORE, THE CONTENTION OF THE APPELLANT THAT THE TRANSACTIO NS TO THE TUNE OF RS. 7,38,08,37,087/- WERE CARRIED OUT BY HER ON BEHALF OF SOME OTHER PERSONS IS NOT FOUND TO BE ACCEPTABLE. HENCE, THIS CONTENTION OF THE APPELLANT IS ALSO REJECTED. THIS GROUND IS DISMISSED. 4. IN VIEW OF THESE FACTUAL ASPECT AND ABSENCE OF A NY DOCUMENT IN SUPPORT OF CLAIMED OF ASSESSEE THAT SHE WAS A SUB-BROKER AND C ASH DEPOSITED IN BANK BELONG TO THE CLIENTS, WE FIND NO FAULT IN THE ORDER OF LD. C IT(A). IN OUR CONSIDERED VIEW, THE ASSESSEE HAS NOT ABLE TO FILE ANY DOCUMENTARY EVIDE NCE WITH REGARD TO THE NATURE AND SOURCE OF THE CASH DEPOSITS IN HER BANK ACCOUNT OF RS. 56,30,000/-. THEREFORE, THE CIT(A) HAS RIGHTLY SUSTAINED THE ADDITIONS. AS FAR AS ALTERNATIVE PLEA OF THE ASSESSEE WITH REGARD TO THE SET OFF OF THE LOSS TO BE ALLOWED AGAINST THE INCOME OF RS. 56,30,000/- TAXED U/S 69 IS ALSO AGAINST THE LE GAL PROVISION OF THE ACT. THIS LOSS WAS A SPECULATION LOSS AND IT COULD BE SET OFF ON LY AGAINST SPECULATION INCOME. THEREFORE, THE CIT(A) HAS RIGHTLY DENIED THE BENEFI T OF SET OFF TO THE ASSESSEE. THE 6 ITA NO. 909/JP/2016. SMT. LEELA DEVI BUMB. FINAL PLEA OF THE LD. A/R THAT THE MATTER MAY BE RE STORED TO THE FILE OF THE AO ALSO CANNOT BE ACCEPTED FOR THE REASONS THAT THE ASSESSE E HAS BEEN PROVIDED SUFFICIENT OPPORTUNITY BEFORE THE AUTHORITIES BELOW TO PRODUCE NECESSARY DOCUMENTS IN SUPPORT OF HER CLAIM. ANY REMAND OF THE ISSUE TO THE FILE OF THE AO AS THIS STAGE SHALL BE AGAINST THE BASIC TENANTS OF LAW. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/12/2017. SD/- SD/- ( FOT; IKY JKO] ) ( HKKXPAN] ) (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL; /JUDICIAL MEMBER YS[KKLNL; /ACCOUNTANT MEMBER JAIPUR DATED:- 08/12/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT-.SMT. LEELA DEVI BUMB, BIJAINAGAR. 2. THE RESPONDENT- ITO, WARD-1, BEAWAR. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 909/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 7 ITA NO. 909/JP/2016. SMT. LEELA DEVI BUMB.