M/s. Chokhani Developers Pvt. Ltd., , Kolkata V. ACIT, Central Circle - 3(3) , Kolkata

ITSSA 141/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5097 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-09-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Additional evidence; Wrong claim
• Section: 153A; 133(6); 132

Judgement Text

IT(SS)A NO. 141/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI A.T. VARKEY, J.M. I.T.(S.S.)A. NO. 141/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED,............. ........................APPELLANT 7/1A, GRANT LANE, 4 TH FLOOR, BOWBAZAR, KOLKATA-700012 [PAN: AADCC2931L] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. .......................RESPONDENT CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN, 110, SHANTI PALLY, E.M. BYPASS, KOLKATA-700107 APPEARANCES BY: SHRI MIRAJ D. SHAH, ADVOCATE, FOR THE APPELLANT SHRI IMOKABA JAMIR, CIT, D.R., FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : SEPTEMBER 30, 202 0 DATE OF PRONOUNCING THE ORDER : OCTOBER 09, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA DA TED 26.09.2018 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE OF ASSESSEES CLAIM FOR LOSS OF RS.10,74,260/- INCURRE D IN THE COMMODITY MARKET TRANSACTIONS. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH BELONGS TO ABHISHEK CHOKHANI GROUP. A SEARCH AND SEIZURE ACTIO N UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED IN THE CA SES BELONGING TO IT(SS)A NO. 141/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED 2 ABHISHEK CHOKHANI GROUP ON 30.11.2012 INCLUDING THE CASE OF THE ASSESSEE. IN PURSUANCE TO THE SAID ACTION, A NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER AND ASS ESSMENT UNDER S4ECTION 153A/143(3) WAS COMPLETED FOR THE YEAR UND ER CONSIDERATION VIDE AN ORDER DATED 26.03.2015, WHEREIN THE CLAIM O F THE ASSESSEE FOR LOSS OF RS.10,72,257/- IN THE COMMODITY MARKET TRANSACTI ONS WAS DISALLOWED BY THE ASSESSING OFFICER BY TREATING THE SAME AS BO GUS ON THE BASIS OF INFORMATION RECEIVED BY HIM THAT THE CONCERNED BROK ING CONCERN M/S. MARIGOLD VANIJYA PVT. LIMITED HAD ALLEGEDLY PROVIDE D ENTRIES OF BOGUS LOSS TO THE ASSESSEE AS ADMITTED BY ITS DIRECTOR SH RI SUCHET SARAF IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH AND SEIZURE ACTION. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 153A/143(3) OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS), INTER ALIA, CHALLENGING THE A CTION OF THE ASSESSING OFFICER IN DISALLOWING ITS CLAIM FOR LOSS OF RS.10, 72,257/- IN THE COMMODITY MARKET TRANSACTIONS AND SINCE THE SUBMISS IONS MADE ON BEHALF OF THE ASSESSEE ON THIS ISSUE WERE NOT FOUND ACCEPT ABLE BY HIM, THE LD. CIT(APPEALS) CONFIRMED THE SAID DISALLOWANCE MADE B Y THE ASSESSING OFFICER, INTER ALIA, FOR THE FOLLOWING REASONS GIVEN IN HIS IMPUGNED ORDER:- I HAVE CAREFULLY CONSIDERED THE ACTION OF THE LD. AO IN MAKING THE IMPUGNED DISALLOWANCE OF RS.10,74,257/- ON GROUNDS THAT THIS AMOUNT REPRESENTED A BOGUS CLAIM OF COMMODITY LOSS. AS PER THE LD. AO, THERE WAS INFORM ATION WITH HIM THAT THE ASSESSEE-COMPANY HAS SHOWN BOGUS LOSS OF RS.10,72,257/- IN THE COMMODITY MARKET TRANSACTI ON, AND THAT THE TRANSACTIONS WERE NOT GENUINE AS NO PAYMENTS HAD BEEN MADE AGAINST PURCHASE, AND THAT E VEN NO MARGIN MONEY WAS DEPOSITED THROUGH THE BROKER. T HE LD. AO HAS RECORDED THAT FURTHER IT WAS REVEALED TH AT THE SAID BROKING CONCERN (LISTED WITH MCX), M/S. MARIGO LD VANIJYA PVT. LTD. AND ITS DIRECTOR ONE SHRI SUCHET SARAF ALLEGEDLY PROVIDED ENTRIES OF BOGUS LOSS TO THE ASS ESSEE AND STANDS AS SUNDRY CREDITORS IN THE BOOKS OF THE ASSESSEE-COMPANY WITH THE SAID AMOUNT. THE LD. AO H AS ALSO RECORDED THAT A SHOW-CAUSE LETTER WAS ISSUED T O THE IT(SS)A NO. 141/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED 3 ASSESSEE ON 01.12.2014 TO EXPLAIN AS TO WHY THE AMO UNT OF RS.10,72,257/- SHOULD NOT BE TREATED AS BOGUS LOSS AND ADDED TO THE TOTAL INCOME IN RESPONSE, AND THAT THE LD. AR HAS PROVIDED SUBMISSIONS WHICH WERE NOT ACCEPTABLE. THEREFORE, THE LD. AO ADDED BACK THE IMPUGNED AMOUN T OF RS.10,72,257/-, TREATING THE SAME AS A BOGUS LOSS. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, THE SOLITARY ISS UE INVOLVED IN THIS APPEAL OF THE ASSESSEE IS SQUARELY COVERED IN FAVOU R OF THE ASSESSEE BY THE VARIOUS DECISIONS OF THIS TRIBUNAL. IN ONE OF SUCH DECISIONS RENDERED IN THE CASE OF NAVIN KUMAR KAJARIA VS.- ITO VIDE ORDE R DATED MAY 24, 2018 PASSED IN ITA NO. 1762/KOL/2017, THE SMC BENCH OF THIS TRIBUNAL DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE V IDE PARAGRAPH NO. 4 OF ITS ORDER, WHICH READS AS UNDER:- 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSE RVED THAT THE CLAIM OF THE ASSESSEE FOR THE IMPUGNED LOS S INCURRED IN TRADING IN DERIVATIVES WAS DISALLOWED B Y THE AUTHORITIES BELOW MAINLY ON THE GROUND THAT THE DIR ECTOR OF THE BROKER COMPANY IN HIS STATEMENT HAD ADMITTED THAT HIS COMPANY WAS INDULGING IN PROVIDING BOGUS LOSS I N CURRENCY DERIVATIVES AS PER THE REQUIREMENT OF THE CLIENTS. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LEA RNED OR HAS LAID EMPHASIS ON THIS ASPECT IN SUPPORT OF THE REVENUE'S CASE. HOWEVER, AS CONTENDED BY THE LEARNE D COUNSEL FOR THE ASSESSEE, THERE IS NOTHING IN THE S TATEMENT OF SHRI SACHIT SARAF, DIRECTOR OF THE BROKER COMPAN Y NOR ANYTHING HAS BEEN BROUGHT ON RECORD BY THE AO. TO S HOW THAT THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE COMPANY THROUGH THE SAID BROKER WERE BOGUS. AS MATT ER OF FACT, A PERUSAL OF THE ORDER OF THE A.O. SHOWS T HAT ENQUIRY WAS DIRECTLY MADE BY HIM FROM MCX STOCK EXCHANGE LTD. BY ISSUING THE NOTICE U/S 133(6) OF T HE ACT IN ORDER TO VERIFY THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE THROUGH M/S. MARIGOLD VANIJYA PVT. LTD. AN D IN REPLY TO THE SAID NOTICE, MCX STOCK EXCHANGE LTD. H AD NOT IT(SS)A NO. 141/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED 4 ONLY CONFIRMED THE TRANSACTIONS BUT HAD ALSO FURNIS HED THE REQUIRED INFORMATION ALONG WITH A CD CONTAINING DETAILS OF ALL TRANSACTIONS MADE BY THE ASSESSEE DU RING THE YEAR UNDER CONSIDERATION THROUGH BROKER MARIGOL D VANIJYA PVT, LTD. AS FOUND BY THE A.O. ON VERIFICAT ION OF THE SAID DETAILS, TOTAL TRANSACTIONS INVOLVING SALE S OF RS.33,81,68,663/- AND PURCHASES OF RS.33,81,66,145/ - WERE MADE BY THE ASSESSEE RESULTING INTO A PROFIT O F RS.2,517/-. THIS RELEVANT EVIDENCE CONFIRMING THE GENUINENESS OF THE TRANSACTIONS MADE BY THE ASSESSE E ON MCX STOCK EXCHANGE LTD. WAS BRUSHED ASIDE BY THE A. D. ON THE GROUND THAT PROFIT SHOWN THEREIN WAS RS. 2,517/ - WHEREAS THE ASSESSEE HAD CLAIMED A LOSS OF RS.13,10 ,688/-. AS SUBMITTED ON BEHALF OF THE ASSESSEE BEFORE THE L D. CIT(A) AS WELL AS BEFORE US, EXPENDITURE WAS INCU RRED BY THE ASSESSEE RELATING TO THE SAID TRANSACTIONS ON A CCOUNT OF BROKERAGE, SERVICE TAX AND OTHER CHARGES LEVIED BY THE BROKER AGGREGATING TO RS.13,13,205/- AND ACCORDINGL Y THE TOTAL LOSS AS CLAIMED BY THE ASSESSEE WAS TO THE TU NE OF RS.13,10,688/-. AS POINTED OUT BY THE LEARNED COUNS EL FOR THE ASSESSEE, THIS ADDITIONAL EXPENDITURE INCURRED BY THE ASSESSEE ON ACCOUNT OF BROKERAGE, SERVICE TAX AND O THER CHARGES WAS DULY SUPPORTED BY THE DOCUMENTARY EVIDE NCE IN THE FORM OF RELEVANT BILLS ISSUED BY THE BROKER AND THERE WAS NO REASON WHATSOEVER GIVEN BY THE LD. CIT (A) FOR NOT ACCEPTING THIS EXPLANATION OF THE ASSESSEE. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES O F THE CASE, I AM OF THE VIEW THAT THE GENUINENESS OF THE TRANSACTIONS MADE BY THE ASSESSEE ON MCX STOCK EXCH ANGE LTD. THROUGH BROKER MARIGOLD VANIJYA PVT. LTD. WAS DULY ESTABLISHED AND THE ACTION OF THE AUTHORITIES BELOW IN DISALLOWING THE CLAIM OF THE ASSESSEE FOR THE RESUL TANT LOSS IN DEALING IN CURRENCY DERIVATIVES IS NOT TENABLE. I, THEREFORE, DELETE THE SAID DISALLOWANCE AND ALLOW T HE APPEAL OF THE ASSESSEE. 5. THE COORDINATE BENCH OF THIS TRIBUNAL HAD ALSO A N OCCASION TO CONSIDER AND DECIDE A SIMILAR ISSUE TO THE CASE OF ACIT VS.- M/S. TIRUPATI AWAS (PVT.) LIMITED AND THE SAME WAS DECIDED BY TH E TRIBUNAL IN FAVOUR OF THE ASSESSEE VIDE PARAGRAPH NO. 10 OF ITS ORDER DATED 28.03.2018 PASSED IN ITA NO. 1560/KOL/2016, WHICH READS AS UND ER:- 10. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERI AL ON RECORD. WE FIND THAT THE AO ISSUED NOTICE U/S. 133(6) OF THE A CT TO MCX STOCK EXCHANGE, MUMBAI. ADMITTEDLY THE SAID STOCK EXCHANG E COMPLIED WITH THE NOTICE ISSUED BY THE AO ALONG WITH SUPPLYING VA RIOUS DETAILS IN IT(SS)A NO. 141/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED 5 RESPECT OF SAID TRANSACTION. ACCORDING TO AO, IT IS INCOMPLETE DETAILS. HOWEVER, THE CIT-A NOTED IN HIS ORDER THAT THE AO F AILED TO VERIFY THE GENUINENESS OF TRANSACTION WITH THAT OF BROKER OF M CX STOCK EXCHANGE. IT IS ALSO OBSERVED THAT THE CIT-A FOUND SATISFIED THAT THE ASSESSEE FILED ALL THE REQUIRED DETAILS AND DOCUMENTS IN SUPPORT O F THE TRANSACTIONS ENTERED INTO BY IT IN RESPECT OF FOREIGN EXCHANGE D ERIVATIVES. WE FIND THAT THE AO MADE THE ADDITION ONLY ON THE BASIS OF STATEMENT RECORDED DURING THE SEARCH & SEIZURE OPERATION IN THE PREMIS ES OF THE SAID SHRI SACHET SARAF, DIRECTOR OF M/S. MARIGOLD VANIJYA P.L TD. THE SAID STATEMENT OF MR. SARAF WAS RETRACTED AT A LATER POI NT OF TIME. THE CIT-A FOUND SATISFIED THAT THERE WAS NO CORROBORATIVE EVI DENCE WHICH SUPPORTS THE VIEW OF THE AO THAT THE SAID TRANSACTI ON WAS UNEXPLAINED. THEREFORE, WE FIND NO ADDITIONAL EVIDENCE, WHICH WA S FILED BEFORE THE CIT-A, BUT NOT BEFORE THE AO. THE CIT-A DELETED THE 6 ITA NO. 1560/KOL/2016 SAID ADDITION ONLY ON THE BASIS OF MA TERIAL/EVIDENCE AVAILABLE ON RECORD, WHICH WERE VERY MUCH BEFORE TH E AO IN THE RE- ASSESSMENT PROCEEDINGS. THE CASE LAWS AS RELIED ON BY THE ASSESSEE BEFORE THE CIT-A WERE RELEVANT AND APPLICABLE TO TH E PRESENT FACTS OF THE CASE. THE CIT-A HAS DISCUSSED THE EACH CASE LAW THOROUGHLY. THUS, THE CIT-A WAS JUSTIFIED IN DELETING THE ADDITION MA DE BY THE AO ON THIS ISSUE. THE GROUNDS RAISED BY THE REVENUE IN THE APP EAL ARE DISMISSED. THE ABOVE DECISION RENDERED IN THE CASE OF TIRUPATI AWAS (PVT.) LIMITED (SUPRA) WAS FOLLOWED BY THE TRIBUNAL TO DECIDE A SI MILAR ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF CIMSYS RESEARCH INDI A PVT. LIMITED VS.- ITO VIDE ITS ORDER DATED 26.02.2020 PASSED IN ITA NO. 1 435/KOL/2018. 6. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASES ALR EADY DECIDED BY THIS TRIBUNAL AS DISCUSSED ABOVE, WE RESPECTFULLY FOLLOW THE DECISION RENDERED BY THIS TRIBUNAL IN THE SAID CASES AND DIRECT THE A SSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE FOR LOSS IN THE COMMODITY MARKET TRANSACTIONS. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 09, 2 020. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT KOLKATA, THE 9 TH DAY OF OCTOBER, 2020 IT(SS)A NO. 141/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. CHOKHANI DEVELOPERS PVT. LIMITED 6 COPIES TO : (1) M/S. CHOKHANI DEVELOPERS PVT. LIMITED, 7/1A, GRANT LANE, 4 TH FLOOR, BOWBAZAR, KOLKATA-700012 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(3), KOLKATA, AAYAKAR BHAWAN, 110, SHANTI PALLY, E.M. BYPASS, KOLKATA-700107 (3) COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.