9911796707
TMI Blog2023 (4) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the material placed on record and available through the enquiries made by the Ld. AO, by affording reasonable opportunity of hearing to the assessee. Both the appeal of the revenue and the Cross objection of the assessee are allowed for statistical purposes. - ITA No.2508/Kol/2018 And C.O. No. 1/Kol/2019 In ITA No.2508/Kol/2018 - - - Dated:- 9-2-2023 - Shri Sanjay Garg, Judicial Member And Shri Girish Agrawal, Accountant Member For the Revenue : Shri Vijay Kumar, Addl. CIT, Sr. DR For the Assessee : Shri A. K. Tibrewal, FCA ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the revenue and cross objection by assessee are against the order of Ld. CIT(A)-4, Kolkata vide Appeal No. 42/CIT(A)-4/2017-18 dated 13.08.2018 passed against the assessment order by DCIT, Circle-10(1), Kolkata u/s. 147/143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ), dated 16.12.2017. 2. Grounds raised by the revenue are reproduced as under: 1] That on the fact and circumstances of the case, the Ld. CIT(A)-4, Kolkata erred in deleting the addition of Rs. 2,99,85,863/- u/s. 68 of the Act by wrongly holding that what co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that trades were executed with the counter-party clients M/s. Fairdeal Vincom Pvt. Ltd. and M/s. Anand Share Broking (P) Ltd. Assessee submitted copy of contract notes, bank statements and other relevant documents to substantiate its claim. 3.1. In the course of assessment, ld. AO issued summons u/s. 131 of the Act to Fast Track Merchants Pvt. Ltd. as well as two counter party clients. In response to this, the broker made its submission through post whereas the other two parties did not respond. Ld. AO further noted that platform of NCME is exploited unscrupulously to contrive and generate bogus profit / loss so as to enable the beneficiary for setting off annual profit in the books or setting off loss in the books to ultimately evade the due taxes. From his inquiry, Ld. AO also noted from the ROC data that Fairdeal Vincom Pvt. Ltd. had been amalgamated and Anand Share Broking Pvt. Ltd. had been struck off. Ld. AO made further inquiry by issuing a letter to NMCE for gathering information in response to which NMCE replied and gave the details of the transaction undertaken through the broker Fast Track Merchants Pvt. Ltd. From the data supplied by NMCE in respect of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43.77 468.77 Total 3,262.50 336.08 3598.58 3.4. Assessee submitted that the amount of Rs.2,99,87,725/- which has been treated by the Ld. AO as concealed amount. in fact represented the value of sales transaction of commodities against purchase of Rs.2,88,33,775/-. Thus, the difference of sale and purchase amounting to Rs.11,50,152/- after brokerage and service tax was offered as speculation profit in the return filed by the assessee. Assessee also explained that the transaction of purchase and sale of commodities were settled on the same day and there was no delivery affected by assessee or broker in respect of such purchases and sales. Thus, the addition made by the Ld. AO is without any basis. 3.5. Considering the submissions made by the assessee, Ld. CIT(A) observed that AO has added the entire turnover of the commodities to the assessee s income. According to him, what to be added even in case of bogus or contrived transaction is, the net result of purchase and sale, and not the entire sales. Ld. CIT(A) also noted that assessee has already shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the material available on record. We take note of the findings given by the Ld. CIT(A) in para 4.3 and 5 which are extracted below: 4.3. I have perused the Submissions of the ld. AR and the Assessment Order. The AO has added the entire turnover of the commodities to the assessee's income. What could be added even in case of bogus or contrived transaction is net result of purchase and sale and not the entire sales. To give an example, if an assessee shows bogus purchase of Rs. 5 crore and bogus sale of Rs. 5.01 crore then what could be added at most is the difference i.e. Rs. 1 lakh not the entire amount Rs. 5.01 crore. This has been held by many courts of and is a trite law as of now. Therefore, addition of Rs.2,99,85,863/- cannot be sustained and the same is deleted. The second issue is that the assessee is showing an income from this alleged bogus transaction. Since the assessee has already offered this income for taxation, therefore, the same cannot be taxed twice. In view of the above discussion addition of Rs. 2,99,85,863/ - is hereby deleted. The third connected issue is regarding addition for commission for 2 per cent on the commodity transaction. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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