2020 (10) TMI 792 - AT - Income Tax

Bogus Loss incurred in the commodity market transaction - addition on the basis of information received that the concerned broking concern M/s. Marigold Vanijya Pvt. Limited had allegedly provided entries of bogus loss - HELD THAT - As decided in Navin Kumar Kajaria 2018 (5) TMI 2024 - ITAT KOLKATA genuineness of the transactions made by the assessee on MCX Stock Exchange Ltd. through broker was duly established and the action of the authorities below in disallowing the claim of the assessee for the resultant loss in dealing in currency derivatives is not tenable. Therefore, delete the said disallowance and allow the appeal of the assessee.

Summary

Issues:
Disallowance of assessee's claim for loss in commodity market transactions.

Analysis:
The appeal was against the disallowance of the assessee's claim for loss incurred in commodity market transactions. The Assessing Officer disallowed the claim based on information that the broking concern provided bogus loss entries to the assessee. The CIT(Appeals) upheld the disallowance, stating that the transactions were highly suspicious as no payments were made to the broker, and no margin money was deposited through the broker. The CIT(Appeals) found the transactions unexplained and against normal business practices. The Tribunal noted that similar issues were decided in favor of the assessee in previous cases. In one case, the Tribunal found that the genuineness of the transactions was established, and the disallowance was deleted. In another case, the Tribunal held that there was no corroborative evidence to support the AO's view that the transactions were unexplained, leading to the deletion of the addition. The Tribunal, considering the similarity of facts, directed the Assessing Officer to allow the claim for loss in commodity market transactions. The appeal of the assessee was allowed based on the precedents and material facts of the case.

Conclusion:
The Tribunal allowed the appeal of the assessee, directing the Assessing Officer to allow the claim for loss in commodity market transactions based on precedents and similar material facts from previous cases.