9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 509 - AT - Income TaxAddition u/s 68 - disallowance of the claim from F O trading - profit from F O trading was to be assessed either as business income or under either of the heads of income A to F of section 14 - HELD THAT - As assessee has already declared the said income from business and offered for taxation in his return. How the same is required to be considered as undisclosed as income is not understood able. The CIT(A) has relied upon the decision in the case of Margaret s Hope Tea Co. Ltd. 1990 (8) TMI 12 - CALCUTTA HIGH COURT - The facts are not distinguishable at this stage. The CIT(A) has rightly adjudicated the matter of considered by giving the detail reasons. No incriminating material is available on record to interfere with the finding of the CIT(A). In view of the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfered with at this appellate stage. Accordingly, both the issues are decided in favour of the assessee against the revenue. Addition being the brokerage and commission u/s 69C - Non-Applicability of Sec. 115BBE - whether amended provision of Section 115BBE is liable to be applicable in the present case also or not? - HELD THAT - The notification speaks about the applicability w.e.f. 01.04.2017 onwards. The present case is the case for the A.Y.2015-16. The expenses having explained and considered by CIT(A) in view of the decision in case of T. A. Quereshi 2006 (12) TMI 91 - SUPREME COURT . We nowhere found any reason to interfere with the finding of the CIT(A) on this issue, therefore, we are of the view that the finding of the CIT(A) in quite correct which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee against the revenue.
Issues Involved:
1. Applicability of Section 68 of the Income Tax Act to the profits from Futures & Options (F&O) trading. 2. Deletion of addition under Section 69C of the Income Tax Act for brokerage and commission expenses. 3. Applicability of amended Section 115BBE of the Income Tax Act. Issue-wise Detailed Analysis: Issue Nos. 1 & 2: Applicability of Section 68 to F&O Trading Profits The revenue challenged the CIT(A)'s decision to allow the assessee's claim that the profit of Rs. 5,75,40,478/- from F&O trading should be assessed as business income or under any of the heads of income specified in Section 14 of the Income Tax Act. The Assessing Officer (A.O.) had added this amount under Section 68, treating it as income from undisclosed sources, claiming the profits were bogus and earned through synchronized trading in illiquid stock options. The CIT(A) found that the assessee had already declared this income as business income in their return and offered it for taxation. The CIT(A) referred to judicial precedents, including the case of Margaret’s Hope Tea Co. Ltd. and M/s Rahil Agencies, which supported the position that such credits should be treated as business income and not as undisclosed income under Section 68. The Tribunal upheld the CIT(A)'s decision, stating that no incriminating material was available to contradict the CIT(A)'s findings. Thus, the Tribunal concluded that the CIT(A) had adjudicated the matter correctly, and the income should be treated as business income. Issue No. 3: Deletion of Addition under Section 69C for Brokerage and Commission The revenue also contested the CIT(A)'s deletion of the addition of Rs. 14,38,512/- made by the A.O. under Section 69C, which pertains to brokerage and commission expenses. The A.O. had disallowed these expenses, considering them fictitious. The CIT(A) examined the amended provisions of Section 115BBE, which restricts the set-off of losses against income taxed under Sections 68, 69, 69A, 69B, 69C, or 69D. The CIT(A) noted that the restriction on set-off of losses was effective from 01.04.2017, and thus, it did not apply to the assessment year 2015-16. Furthermore, the CIT(A) distinguished between "expenditure" and "loss," referencing the Supreme Court's decision in T.A. Quereshi, which clarified that business losses are allowable on ordinary commercial principles in computing profits. The Tribunal agreed with the CIT(A)'s interpretation and found no reason to interfere with the CIT(A)'s findings on this issue. Conclusion: The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s decision on all contested issues. The Tribunal affirmed that the profits from F&O trading should be treated as business income, and the brokerage and commission expenses were rightly allowed. The amended provisions of Section 115BBE were deemed inapplicable for the assessment year 2015-16. The order was pronounced in the open court on 28/04/2022.
|
