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TMI Blog2016 (8) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... the speculative loss of ₹ 18,31,596/- against the business income of the assessee - Decided against assessee. - ITA No. 501/JP/2011 - - - Dated:- 20-6-2016 - SHRI BHAGCHAND, AM AND SHRI LALIET KUMAR, JM For The Assessee : Shri Rajeev Pandey (CA) and Shri Dakshayani Pandey (Adv) For The Revenue : Shri M.S. Meena (CIT) ORDER PER: LALIET KUMAR, J.M. This is an appeal filed by the assessee against the order dated 25/03/2011 passed by the ld CIT, Alwar U/s 263 of the Income Tax Act, 1961 (in short the Act). The grounds taken by the assessee in appeal are as under:- 1 On the facts and in the circumstances of the case, Ld. Commissioner of Income Tax erred- (i) in invoking provisions of Section 263 of IT Act, 1961 and in not following provisions of law. (ii) in directing the assessment order dated 25/3/2011 passed u/s 143(3) to be prejudicial to interest of revenue and not following provisions of law. 2. In holding Loss incurred amounting to ₹ 18,31,596/- to be Speculative Loss and in not appreciating facts already visited and perused by ld A.O. during course of assessment proceedings and not following provisions of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice u/s 263 of the IT Act on the ground that the Ld. A.O. has allowed commodity exchange loss of ₹ 1831596/- from normal profit of business income which is erroneous and prejudicial to the interest of the revenue. In this context we respectfully submit that: Assessee is carrying on business of Aadat and trading of Food grain, Tilhan and Dalhan etc. since 1990. Assessee s main source of income is from this business activity. The books of account of the firm have been audited by a qualified chartered accountants firm for the assessment year under consideration. Assessee filed return of income for the assessment year 2006- 07 and declared income of ₹ 179730/-. The Ld. Assessing Officer issued notice U/s. 143(2) of the Income Tax Act. On 29.03.2007 and completed assessment on 26.12.2008 and assessed the income at ₹ 260010/- against the declared income of ₹ 179730/-. Thus the Ld. Assessing Officer made an addition of ₹ 80280/- in the total income. The Ld. Assessing Officer issued questionnaire on 02.01.2008 and asked to the assessee at point no. 18 of the said questionnaire that please explain the NCDEX loss of ₹ 18315 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is treated as Speculative Loss amounting to ₹ 18,31,596/- which was claimed by the assessee and erroneously allowed by the A.O. while completing the assessment. Considering the facts of the case and claim of the assessee, the issue requires proper verification at the level of the Assessing Officer. Accordingly, the assessment is set aside, being prejudicial and erroneous to the interest of the revenue, to treat the said loss as speculative loss and complete the assessment accordingly. 4. The ld AR of the assessee before us has submitted that the assessee has submitted all the records before the ld Assessing Officer during the original assessment proceedings in response to question No. 18 of the questionnaire and has submitted that the NCDEX loss is not speculative loss but is a business loss and occurred on account of hedging transactions and therefore, the order passed by the ld Assessing Officer in the original proceedings should not have been interfered by the ld. Commissioner after passing the impugned order. 5. On the other hand, the ld CIT DR has submitted that the order passed by the ld Assessing Officer is erroneous and prejudicial to the interest of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the High Court has rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified. The second contention has to be rejected in view of the finding of fact recorded by the High Court. It was not shown at any stage of the proceedings, that the amount in question was fixed or quantified as loss of agricultural income and admittedly it is not so found by the Tribunal. The further question whether it will be agricultural income within the meaning of section 2(1A) of the Act as elucidated by this court in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466, does not arise for consideration. It is evident from the order of the High Court that the findings recorded by the Tribunal that the appellant stopped agricultural operation in November, 1982, and the receipt under consideration did not relate to any agricultural operation carried on by the appellant, were not questioned before it. Though we do not agree with the High Court that the said amount was paid for breach of contract as indeed it was paid in modification/relaxation of the terms of the contract, we hold that the High Court is justified in concluding that the said amount was a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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