9911796707
TMI Blog1994 (10) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... in this account. The assessee clarified that during the year the appellant had entered into forwarding contracts for export of pepper to various countries including U.S.S.R. As it had to purchase pepper at higher rates than the contracted rate in order to meet the export obligations, it was explained that the appellant had made use of the hedging facilities with India Pepper Spices Trade Association. As exports were fulfilled only somewhere in the Samvat Year 2038 relevant to the assessment year 1983-84, the credit balance standing in the IPSTA Clearance Account of Rs. 50,117 was duly transferred to the profit and loss account. At the same time the assessee conceded that the speculation profits resulting from such hedging transactions req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return. Thus, he levied penalty in a sum of Rs. 47,137. The assessee appealed. 2. The CIT (Appeals) was of the view that the assessee came forward with a revised return only when his attention was drawn to the credit balance in the IPSTA Clearance Account and that too in the course of the assessment proceedings. He also noticed that the appellant did not raise any whimper that such speculation profit was properly assessable in the year in which the export contracts were fulfilled. From this he drew the inference that the appellant was aware that the speculation profit was to be offered from year to year and inspite of such awareness, the appellant did not do so and such omission could only be the out-come of adjusting the future specu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account books when the Assessing Officer made enquiries about the nature of the transactions, it dawned on the assessee that the impugned amount being a positive figure arising on hedging transactions was to be included in the income of the assessee on year-to-year basis and that prompted the assessee to come forward with a revised return. The explanation of the assessee in this connection is worth recalling : " SOUTH INDIA PRODUCE CO. P.B. No. 344, Cochin - 2. 14-9-1983 The Income-tax Officer, A-Ward, Mattancherry. Sir, Ref. :46-011-FT-9391/CHN-MAT-A/81-82 1. On 12-9-1983 when our Advocate Sri D. A. Kamath had appeared before you in connection with the finalisation of our assessment for the assessment year 1981-82, he had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch transactions as the export obligations by then was fulfilled. From these facts, we hold that the assessee had not concealed the existence of the account showing the credit balance. The very fact that the assessee included the credit balance as income in the subsequent year would support the plea of the assessee that it was under the bona fide impression that the credit balance if any in the IPSTA Clearance Account was to be offered for assessment only upon completion of the export obligation. May be, the view that profit or loss on the hedging transactions are to be considered only along with fulfilment of export obligations is untenable in law but validity or otherwise of such a view is not germane to the issue whether the belief enter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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