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TMI Blog2016 (5) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... n placed before us to controvert this finding of the learned CIT(A).- Decided against assessee Charging of interest under section 234B and 234C is consequential and mandatory and the AO has no discretion in the matter. See Anjum Ghaswala (2001 (10) TMI 4 - SUPREME Court ) - ITA No. 4859/Mum/2014 - - - Dated:- 25-5-2016 - Shri Jason P. Boaz, Accountant Member And Shri Sandeep Gosain, Judicial Member For the Appellant : None For the Respondent : Shri S.R. Kirtane ORDER Per Jason P. Boaz, A. M. This appeal by the assessee is directed against the order of the CIT(A)-24, Mumbai dated 27.03.2014 for A.Y. 2009-10. 2. The facts of the case, briefly, are as under: - 2.1 The assessee (Proprietor of M/s. Blue Impex), who is in the business of manufacture, export and resale of ready made garments filed his return of income for A.Y. 2009-10 on 29.09.2009 declaring loss of ₹ 9,66,297/- from business and also declared loss of ₹ 15,03,455/- from futures and options. The case was selected for scrutiny and the assessment was completed under section 143(3) of the Income Tax Act, 1961 (in short 'the Act') vide order dated 22.12.2011, wherein the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash book maintained by the Appellant. Thus, the addition of ₹ 25,93,000/- under section 69 of the Act is not at all justified and the same may be deleted. (iii) The Ld. CIT(A) further failed to appreciate that the Appellant has furnished all relevant details/ evidence during the course of assessment proceedings as well as appellate proceedings to prove the genuineness of cash transactions. Hence, treating the cash amounting to ₹ 25,93,000/- deposited in the saving bank account of the Appellant as unexplained investment under section 69 of the Act is unjustified and the same may be deleted. 3. Denying the benefit of setoff of business loss against the addition made under section 69 of the Act -Rs.9,66,297/- (i) The Ld. CIT(A) erred in confirming the action of the Ld. A.O. in not disallowing the benefit of setoff of business loss amounting to ₹ 9,66,297/- incurred during the year against the addition of ₹ 25,93,000/- made under section 69 of the Act. The Appellant prays that the denial of setoff of business loss against the income determined under section 69 is not at all justified and the same may be allowed. 4. Disallowance of shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the relevant period under consideration and that all relevant details/evidences in this regard were furnished before the authorities below in order to prove the genuineness of the cash deposits. It is submitted that in view of the above, the said addition be deleted as it is unjustified. 6.2 Per contra, the learned D.R. for Revenue emphatically supported the orders of the authorities below. According to the learned D.R., the AO had received AIR information that cash deposits amounting to ₹ 25,93,000/- had been made by the assessee in his undisclosed Corporation Bank account No. 1010822, Mandvi, Mumbai. It is only on being required to by the AO, that the assessee furnished a copy of the aforesaid bank account and his explanations vide letter dated 17.11.2011. The learned D.R. submitted that after due consideration of the assessee s averments, the AO observed that the said bank account and alleged share transactions were never disclosed in the assessee s financial statements and assessee s claim that the said cash deposits were made from cash in hand and subsequently that they were from cash sales were not supported by any material evidence and consequently brought the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24/04/2008 Cash 98,000 06/06/2008 Cash 5,000 16/06/2008 Cash 1,00,000 30/06/2008 Cash 20,000 03/07/2008 Cash 1,00,000 04/07/2008 Cash 1,00,000 07/07/2008 Cash 1,50,000 19/07/2008 Cash 1,00,000 08/08/2008 Cash 1,00,000 03/10/2008 Cash 80,000 13/10/2008 Cash 1,00,000 17/10/2008 Cash 80,000 29/10/2008 Cash 1,10,000 05/11/2008 Cash 1,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,93,000/- from time to time and these are reflected in the sales register and the total gross sales of ₹ 54,11,64,156/- and net sales of ₹ 50,39,11,658/- are reflected in the P L Account and the Balance Sheet of the assessee and these are also audited by the auditors. Even though the cash sales of ₹ 25,93,000/- are reflected in the total sales of ₹ 54,11,64,156/ 50,39,11,658 in accounts and cash and bank balance figures of the business accounts in the name of Blue Impex tally, the entries of transfer of cash totalling ₹ 25,93,000/- exactly tally with the requirement of cash of the assessee to make payment to third parties from his savings bank account with Corporation Bank, Mandvi, Mumbai (CBMM) for trading in shares and on forwarding in futures and options and/or for giving interest free loans to parties from time to time. It is little odd that cash sale are occurring two or three days prior to deposit of cash in bank account with Corporation Bank, Mandvi, Mumbai (CBMM) and to necessitate payments by the assessee. However, there are no cash sales other than these cash sales totalling ₹ 25,93,000/- especially when assessee had a huge turnover of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the amount required as cash sales in his business books and immediately gone ahead with transferring cash from his business accounts to his savings account with CBMM, however, these transactions were not reflected in business accounts which were audited by the tax auditor. It is once again repeated that the savings bank account with CBMM does not form part of assessee's business accounts of Blue Impex and the personal accounts of the assessee with CBMM and Broker/ Middleman/Agent are not audited even though transactions run into crores of rupees and were made in more than 100 companies. Even though, assessee has maintained accounts meticulously and entries of cash transactions tally in principle, however, the entries of cash transfer from the business accounts to the personal accounts are not reflected anywhere in business accounts of Blue Impex. Thus, it is held that the deposits of cash made in CBMM account appear to be transfer, to have come by way of cash from Blue Impex to the personal account with Corporation Bank, Mandvi, Mumbai, the entries were systematically made to give them a colour of legitimacy to account for unaccounted cash deposits with Corporation Bank, Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 9,66,297/- (Business Loss of ₹ 15,03,455- minus Business Profits of ₹ 53,71,580/- against the addition of ₹ 25,93,000/- made under section 68 of I.T. Act, 1961 and the Assessing Officer has erred in denying the same. First of all the income of ₹ 25,93,000/- is assessable to tax under section 69 of I.T. Act, 1961 which is enshrined in chapter VI of I.T. Act, 1961 and each section starting from 68, 69, 69A, 69B and 69D of I.T. Act, 1961 is a separate head of income in itself and income taxed under each one of these sections is taxable as Income of the assessee of that previous year/financial year and provisions of section relating to set off of and carry forward of losses from one head of income mentioned in section 70 to 79 of chapter IV of I.T. Act, 1961 refers to Income from House Property, income from business, Income from Capital Gains/Loss and Income from Other Source and none of these sections mentions anything about set off of losses from business and or capital loss and/or house property against Income from section 68, 69, 69A, 69B, 69C and 69D of I.T. Act, 1961 but mention about setting off against the Income from House Property, Busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence has been brought on record to controvert the findings of the learned CIT(A) that the business loss from futures and options is to be treated as ₹ 15,05,455/- and allowed to be set off as per sections 70 to 79 of the Act. 8.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record. It is seen that the learned CIT(A), after considering the submissions of the assessee, has held as under at paras 6.1 to 6.1.5 of the impugned order: - 6.1 Decision:- 6.1.1 Assessee has disputed the disallowance of short term capital loss ₹ 17,60,242/- on the ground that the assessee had submitted all the details in respect of these share transactions of purchase and shares totalling ₹ 9,35,75,657/- (Purchases/Rs.9,18,15,220/- (Sales) which were made out of funds invested with In venture growth with whom assessee had deposited funds out of his savings bank with Corporation Bank, Mandvi, Mumbai and has submitted that the short term capital loss of ₹ 17,60,242/- should be allowed. 6.1.2 It appears from the return of income that assessee had disclosed a net loss of ₹ 9,66,297/- as follows and since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings, assessee's CA had furnished details of ₹ 17,60,242/- in respect of transactions in shares and securities which were not disclosed in the return of income and it is the claim for this loss of short term capital loss of ₹ 17,60,242/- was disallowed by the Assessing Officer. 6.1.4 The transactions in futures and options which resulted in loss of ₹ 15,03,455/- and which was shown as a business loss of ₹ 15,03,455/- in the return of income, were not reflected in the P L Account and Tax Audit Report which mention only about trading in readymade garments and textiles and only the net profit of ₹ 5,37,157/- is reflected in the P L Account of the assessee and the so called net loss of ₹ 15,03,455/- in futures and options is also not reflected either in the P L Account or in the capital account of the assessee. Moreover, if the business loss in futures and options of ₹ 15,03,455/- was incurred the assessee would have made payment of ₹ 15,03,455/- to the person/party who made transactions in futures and options on assessee's behalf and if so assessee would have made payment to this person/party. Perusal of the copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 17,60,242/- is different from the loss of ₹ 15,03,455/- in futures and options, is also not valid because the entries for the same are not reflected anywhere in business accounts which are audited and is also not reflected in the savings account with Corporation Bank, Mandvi, Mumbai, and if it were so, the loss of ₹ 15,03,455/- will be taxable under section 69/69C of I.T. Act, 1961 and, therefore, the alternate contention made during the appellate proceedings is also rejected on facts and in law. 6.1.5 Prima facie, this loss of ₹ 17,60,242/- which was denied as short term capital loss of ₹ 17,60,242/- in the computation of total income worked out by the Assessing Officer in the assessment order, was nothing but the business loss of ₹ 15,03,455/- in futures and options claimed in the return of income with the difference of ₹ 2,56,787/- (17,60,242 - 15,03,455) was either a component which was not disclosed in the computation of revised loss ₹ 17,60,242/- in the assessment/ appellate proceedings or loss/expenses of ₹ 2,56,787/- which was wrongly claimed. Assessee has failed to furnish the details of this difference of ₹ 2,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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