9911796707
TMI Blog2019 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... owed. 5. Appellant prays for just and equitable relief. 6. Appellant prays for cancellation of interest charges u/s.234B. 7. Appellant prays to add, alter, amend, clarify, modify, take Additional Ground/s and /or withdraw the Ground/s during Appellate proceeding." 2. When the matter was called up for hearing today, no one has appeared on behalf of the assessee. It appears from the record that on earlier dates of hearing also, neither the assessee not his Authorized Representative was present to represent its case. The notice of hearing sent to the assessee has not been returned un-served. In these circumstances, it appears that the assessee is not interested in prosecuting its appeal. We have recorded the presence of Ld. DR. In these facts and circumstances, we proceed to decide the appeal with the assistance of the Ld. DR and materials/ documentary evidences available on record. 3. The brief facts in this case are that the assessee is engaged in the business of trading in steel products including scrap. He filed return income for the year under consideration declaring 'Nil' income. At the end of assessment proceedings u/s.143(3) r.w.s 144 of the Act, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The compliance was due on 26.03.2014 however the appellant had made up his mind not to respond to these statutory notices. It is not understood as to what were the compelling circumstances which prevented the assessee to appear before the AO. However the fact remains that the appellant was totally non cooperative during the assessment proceedings. The AO noticed that there were cash deposits of Rs. 49,29,010/- in the saving bank account of the assessee with Cosmos Bank & Jalna Merchant Cooperative Bank. Since the assessee had failed to offer any explanation regarding the sources of cash deposits, therefore the AO had no alternative but to make an addition of Rs. 49,29,010/- U/s 69 of the Income Tax Act. During the course of appellate proceedings, the counsel of the appellant submitted copy of cash book and it was argued that cash deposits were made out of cash sales. Since these evidences were imperative for the adjudication of this ground of appeal, these were admitted under sub-rule 4 of Rule 46A. The AO was also provided an opportunity vide my letter No.ABD/CIT(A)- 1/NLA/report/2015- 16/1497 dated 15.12.2015. In response, the AO vide his remand report dated 03.03.2016 stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that in view of sub-rule (4) of rule 46A and the provisions of section 250, the Commissioner (Appeals) was not justified in rejecting confirmation letters produced by the assessee and he should have directed the Assessing Officer to consider said confirmation letters and find out identity, creditworthiness, etc. of persons who had made fixed deposits. Accordingly this objection of the AO to admit additional evidences is rejected. The AO has further stated in the remand report that he had issued summons U/s 131 of the Income Tax Act dated 22.12.2015 directing the assessee to submit his books of account including cash book, bank book, ledger, purchase/sale bills, delivery challans, transport bills, voucher for various expenses etc. The compliance was due on 29.12.2015. In response, the AR of the assessee sought an adjournment for a week and case was therefore adjourned to 11.01.2016. However neither the appellant nor his AR bothered to appear on the said date. The copy of remand report was also made available to the counsel of the appellant vide my letter dated 04.03.2016. In response, the counsel of the appellant has again reiterated that the cash deposits were made out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited with the adverse consequences if he fails in discharging the duty cast upon him by not furnishing necessary particulars called for by the Assessing Officer. There is no rule that if the assessee had not adduced necessary evidence/material at the assessment stage, then the appellate authorities must remit the matter back to the file of the Assessing Officer for considering the additional evidence later on sought to be produced before them. Only if the assessee was prevented by sufficient cause in making available necessary evidence to the Assessing Officer or the assessment was improperly framed by the Assessing Officer by either not allowing adequate opportunity to the assessee or by not considering the relevant material, then the matter can be restored for a fresh decision. Thus it has to be decided by the appellate authorities in each and every case distinctly as to whether the addition made for non-compliance on the part of the assessee at the assessment stage be sustained or the assessee be allowed a fresh opportunity to make up the deficiency in the second round. However in the interests of natural justice, the undersigned had provided a second opportunity to the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atives trading but had entered into commodities transactions with MCX exchange. Therefore it is clear that the provisions of section 43(5)(d) were not applicable in the case of assessee. The definition of "derivative" under this Act applied only to derivatives having or other financial instruments as the underlying shares & securities. Therefore, the commodity derivatives were not governed by Securities Contracts (Regulation) Act, 1956 but by the Forward Contracts (Regulation) Act, 1956. One of the amendments carried out by the 2013 Budget was the introduction of commodities turnover tax (CIT), effective from 1st of July 2013 which amended the definition of speculative transaction under Income-tax laws to exclude commodity derivative transactions under Income-Tax laws carried out in a recognized commodity exchange. The exclusion applied to all commodity derivatives transactions in agricultural as well as non7 agricultural commodities from 01.07.2013 and not just non agricultural commodity derivatives, which were subject to CIT. This amendment was however, effective from assessment year 2014-15 and it applied to all transactions on or after 1st April 2013. Therefore, this amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. However the Hon'ble Mumbai ITAT held the loss to be speculative in nature and not business loss. This decision is fully applicable to the present case. In these facts & circumstances, I have no hesitation in confirming the addition made by the AO. The addition of Rs. 16,25,942/- is sustained and accordingly this ground of appeal is dismissed." 8. On perusal of the findings of the Ld. CIT(Appeals) with regard to the first ground of appeal, we find that the Ld.CIT(Appeals) while confirming addition, has placed reliance on the decision of the Co-ordinate Bench of the Tribunal, Mumbai in the case of M/s.Varsha Corporation Ltd. Vs. DCIT in ITA No.6534/Mum./2012 dated 17.01.2014 for the assessment year 2009-10 wherein the Co-ordinate Bench of the Tribunal has held that the loss to be speculative in nature and not business loss. As stated earlier, the assessee is not keen to pursue his appeal before us and nothing has been brought on record to controvert the findings of the Ld. CIT(Appeals). In view of the above facts and circumstances, we find no infirmity in the order of the Ld. CIT(Appeals) and the same is thereby, upheld. Accordingly, ground No.2 raised in appeal by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had also paid Exercise Duty and CST on the above purchases. purchases. It was further argued that the entire M.S. Scrap had been sold for Rs. 56,39,481/- and sale proceeds were also credited to the profit & loss account. In these circumstances, it was not understood that when the AO had accepted the sales then how could he have disallowed the purchases of Rs. 40,61,348/-. On careful consideration of facts & circumstances in the present case, I am partly inclined to accept the arguments of the appellant. It is not in dispute that M.S. scrap so purchased by the appellant had been sold to various buyers in the current year itself. Therefore the action of the AO to disallow an amount of Rs. 40,61,348/- out of total purchases of Rs. 54,78,795/- suffers from fallacy. It is not discernible from the assessment order as to how the said figure had been worked out. It is further seen that all the payments for purchases have been made through banking channels. If the purchases were bogus then how the assessee had made corresponding sales which have not been disturbed by the AO and therefore stood accepted. However the fact remains that the appellant has not furnished the copies of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
