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TMI Blog2021 (6) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... n disallowing the set off of loss from derivative and share trading under section 43(5) of the income tax act 1961 alleging it has loss from speculative business. 1. At the outset the Ld.AR for the assessee had submitted that the assessee is not pressing the ground 1, on account of smallness of the amount, raised before the tribunal and the same kindly be dismissed. However he had submitted that same a precedent against the assessee or acceptance of any liability. The Ld.DR had no objection for dismissing the ground is not pressed. 2. In the light of the withdrawal of the ground by the Ld.AR for the assessee we, dismissed the groundno. 1 raised book by the assessee before us is not pressed. The withdrawal of the ground will not be treated as a acceptance of the liability by the assessee and shall not be a ground to tax the assessee in subsequent years. 3. In respect of ground No. 4, of the assessee appeal Ld.ARhad drawn our attention to the order passed by the assessing officer to the following effect: "The assessee derives income from trading of stock/shares, future & option on BSE & NSE through SERI. ". 4. Further he had drawn our attention to the following paragraph of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments cited at bar during hearing by both the parties. During the course of argument, the Ld.DR was confronted with the order passed by the tribunal, in the case of the assessee for the assessment year 2006 - 07 on the same issue ,which was also mentioned by the assessing officer, in his order. . He had fairly considered that, the above said order has not been brought to the notice of the Commissioner appeal. . In our view once the issue has been attained finality, no fresh adjudication is required. Further we are of the opinion that the assessee is regularly showing the income from the share trading as business income, therefore the finding recorded by the AO and the CIT(A) are without any basis and are accordingly dismissed. In the light of the above, respectfully Following the decision of the tribunal for the assessment year 2006-07, we allow this ground no 4 raised by the assessee before us. 11. In respect to ground no 3 Pertaing to SmtSita Devi ,the addition made by the assessing officer and confirmed by the CIT(A) for an amount of Rs. Rs. 600528.0Q, the Ld.AR for the assessee has drawn our attention to the order of the assessing officer . 12. The Ld. A.O. has discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing officer as well as by the CIT (A).. He had drawn our attention to the following paragraph of the order passed by the Commissioner appeal "The facts of the case as well as submissions made by the appellant have been carefully considered. It is observed that the AO had made addition of Rs. 6,00,000/- being unexplained deposit from Smt. Sita Gupta on the ground that the aforesaid depositor was not assessed to tax for last 3 4 years. Further, the nature and terms & conditions for advancingmoney was not furnished. On the other hand the appellant has emphasied that PAN, complete postal address, ITR, and confirmation of the aforesaid depositor were furnished and as such onus u/s 68 of the Act had been discharged. However, merely filing of the aforesaid documents is not enough to discharged onus u/s 68 of the Act. Reliance is placed on the decision of the Hon'ble Calcutta High Court in the case of CIT vs. Korlay Trading Co. Ltd. 232 ITR 820. Cash credit can be assessed even if transaction is through cheques. Reliance is placed on the decisions of the Hon'ble Courts as under:- (i) CIT vs. Precision Finance P. Ltd. (Cal) 208 ITR 465 (ii) K.C.N. Chandrasekhar vs. ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account in M/s Umesh Gupta ( Share Trading business) of the appellant. 23. The confirmation from all six persons were submitted before CIT (Appeals) which were also remanded to A.O. by the CIT (Appeals). 24. The appellant obtained the copies of the summons from the office of the AO after the assessment for the purpose of preparing appeal before CIT(A). Summons dated 29/05/2013 were issued and dispatched on 30/05/2013 to all the six lenders of unsecured loans by the Ld. AO during the remand proceedings who required certain documents and personal presence was not at all made compulsory as per summons. The compliance was required to be made with in short period till 07/06/2013. (Refer PB- 81-92 for copy of summons ). As per order sheet entries of the remand proceedings (Refer PB-2-3) it is proved that AO did not gave opportunity to the appellant to produce the lenders. Therefore the contention of the Ld. AO (para 3.2.2 inner para 3 of CIT Order giving contents of remand report) and Ld CIT (Appeals) (refer second para on page 7 of Ld. CIT (A) Order) that the persons giving loan were not produced is contrary to facts and liable to be rejected. 25. The remand report was not confronte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANALVPG3865H Rs. 50000/- though cheque no. 713894 dated 23/03/2008 of HDFC,Kanpurredited on 24/03/2008 in SBI account no. 11233381841 of M/s Umesh & Co. (proprietor is appellant Refer PB-120 1. Confirmation of account refer PB-112 2. Income tax return with computation of income for the AY 2008-09 showing GTI of 1,34,340.00. Refer PB-113-114 5. Arvind Kumar Goel, Railway Road, Prithvi Darwaja, Kaimganj PANAAOPG9168M Rs. 100000/- though cheque no. 72805 dated 25/02/2008 of Bank of India, Kaimganj credited on 26/02/2008 in SBI account no. 11233381841 of M/s Umesh & Co. (proprietor is appellant) Refer PB-120 1. Confirmation of account refer PB-115 2. Intimation under section 143(1) of the Income Tax Act, 1961for the AY 2008- 09 showing GTI of 1,07,650.00. Refer PB-116 3. The lender appeared personally and given statement to AO in remand proceedings and accepted giving of loan. Refer PB-340-355 6. Sarita Goel Railway Road, Prithvi Darwaja, Kaimganj PAN-AAPPG7055G Rs. 100000/- though cheque no. 005073 dated 25/02/2008 of Central Bank of India, Kaimganj credited on 26/02/2008 in SBI account no. 11233381841 of M/s Umesh & Co. (proprietor is appellant) Refer PB-120 1. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te order the Ld. CIT(A) on irrelevant considerations. Neither the remand report nor its enclosure were confronted by the CIT(A). Also the mandatory notice under section 251(2) of the Income Tax Act, 1961 was not issued by the CIT(A). 29. Therefore, in view of the facts and circumstances stated above the addition under section 68 made by AO and sustained by CIT(A) is without any adverse material on record, illegal and liable to be deleted. 30. Per contra DR for the revenue had vehemently relied upon the order passed by the assessing officer as well as by the CIT (A). He had drawn our attention to the following paragraph of the CIT(A):- "3.2.2 The AO vide letter dated 19/24-06-2013has furnished reman report which is reproduced as under:- "2 In this case return was e-filed on 28-09-2008 at a loss of Rs. 9,46,518/-. It was selected for scrutiny through CASS and first notice u/s 143(2) was issued on 17-08-2009. It was finally assessed at an income of Rs. 13,04,150/-on 28-10-2010. There were two major additions made in the assessment order each amounting to Rs. 76,00,000/- on the ground of (i) unexplained addition of Rs. 6 lac in capital account after receiving the same from six pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Arvind Goyal (loan of Rs. 1,00,000/-) and Smt. Sarita Goyal(loan of Rs. 1,00,000/-) attended and their statements on oath were recorded. The source of fund has been mentioned by the AO as income from business of the depositors. The AO has further reported that the other four depositors, namely, Raja Ram Ramchandra (loan of Rs. 2,00,000/-), Ajay Kumar Garg (loan of Rs. 1,00,000/-), Gauri Goyal (loan of Rs. 50,000/-) and Devendra Goyal (loan of Rs. 50,000/-) have not appeared in response to summons u/s 131 of the Act. According to the AO in the absence of physical appearance of the aforesaid four creditors, the loans totaling to Rs. 4,00,528/- have remained unexplained 'and rightly added to the income of the assessee. The appellant in his rejoinder has mentioned that the appellant had furnished identity of the lender, PAN number and complete postal addresses of all the depositors, confirmations letters of the depositors, ITRs etc. Thus it has been argued that the appellant has discharged onus u/s 68 of the Act. It is observed that non-appearance of the aforesaid four creditors establishes beyond doubt that the assessee has failed to discharge his onus u/s 68 of the Act. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record, including the judgments cited at bar during the course of hearing by both the parties. It was the case of the Ld.AR for the assessee, during the course of virtual hearing that the remand report was not provided to the assessee and therefore the matter is required to be remanded back to the file of the assessing officer. While going through the order passed by the Commissioner appeal(supra) , we have reproduced the following paragraph of the CIT(A) order " 3.2.1 The appellant has furnished rejoinder in which he has reiterated the facts as narrated in the earlier submissions as reproduced above and are not repeated here for the sake of brevity." 33. The finding recorded by the CIT(A) clearly shows that the assessee was provided the copy of the remand report by the CIT(A), to which the assessee had filed the rejoinder also. In our considered opinion, the assessee should make the true and correct statement during the virtual hearing, and it is not expected from the the assessee to make any incorrect submissions. 34. We have also noted that the assessee had filed the additional document /evidence in support of his case to prove the creditworthiness , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3000/- to Rs. 30, 000/- . Further it was mentioned that in subsequent the months the said Smt Sarita Goel was not having income . In our considered opinion the assessee had not be to prove creditworthiness of namely Smt Sarita Goel , a the cash was deposited just two/ three days before the issuance of Cheque. In the light of the above the addition made on account of creditor Smt Sarita Goel, is liable to be confirmed. Accordingly we confirm the addition of Rs. 1 lakh on account of cash creditor Smt Sarita Goel. 39. The other person who was examined by the assessing officer during the remand proceedings was Sh. Arvind Goel. The assessing officer has noted that said Sh. Arvind Goel, was not assessed income tax and the cash flow was generated there is to give colour of the loan transaction. We have examined the record and found that the assessee was not able to demonstrate the creditworthiness and genuineness of the transaction before the assessing officer and before us to the tune of Rs. 100, 000/-. Accordingly the addition made on account of the creditor namely Sh. Arvind Goel is confirmed . 40. In the result, the addition of Rs. 2 lakh on account of cash credit of Smt Sarita G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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