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TMI Blog2022 (8) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the veracity of the documents filed by the assessee. This, in our considered view, is a wrong reading of the observations made by the AO. Thus, we have no hesitation to hold that both the orders passed by the CIT(A) as well as the Tribunal are perverse and there is absolutely no case made out by the assessee for deleting the addition of loss from Future Option transactions. Therefore, the first issue is answered in favour of the revenue and against the assessee. Loss in shares and securities - ITAT held that the CIT(A) was fully justified in his conclusion that the loss cannot be regarded as sham - We once again reiterate that CIT(A) has never recorded any such finding with regard to the nature of the transaction all that he has done is to confirm of the finding of the assessing officer and the loss was a speculative loss. Therefore, the finding of the tribunal in paragraph 19 is absolutely perverse. Thus, for the above reason we are of the considered view that the finding of the tribunal needs to be set aside and accordingly set aside. The order passed by the CIT(A) on the said issue stands confirmed and it shall be deemed that the confirmation is in its entirety with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate for the respondent/assessee. The revenue has suggested the above substantial question of law in a composite form. The question involves three issues, namely, (i) loss on derivative to the tune of Rs. 3,19,76,907/-; (ii) loss in shares and securities to the tune of Rs. 37,95,659; and (iii) coordination charges to the tune of Rs. 51,00,000/- In order to answer the substantial question of law, we proceed to deal with the three issues in seriatim. The assessee filed its return of income on 15th November, 2007 disclosing a total income of Rs. 10,58,28,346/-. The case was processed under Section 143(1) of the Act and, subsequently, the case was selected for scrutiny. Notices were issued under Section 143(2) and Section 142(1) of the Act. In response to such notices, the assessee s authorised representative appeared before the Assessing Officer. With regard to the first issue, namely, the loss on derivative, the assessee claimed the loss arising from future option, loss on transaction entered on National Stock Exchange (NSE) as appeared in Form 10DB. As per the content of the said Form, the value of the transaction was Rs. 99,25,113,859/- on which STT of Rs. 1,68,727/- was paid. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer held that the transactions with the said stock broker during the year under consideration are nothing but a make-believe affair and arranged one in collusion with the assessee resulting in tax evasion. Ultimately, it was held that the bonafides and genuineness of the transactions have not been satisfactorily and properly proved by the assessee and they have not discharged the onus cast upon them. Further, the transactions are not bonafide commercial transactions but are sham, bogus, collusive and an artificial arrangement. In the light of the same, the entire amount of Rs. 3,19,76,907/- was disallowed. Aggrieved by the same, the assessee preferred appeal before the Commissioner of Income tax (Appeals)-XXXVI, Kolkata [CIT(A)]. Though at the first blush it appears that the order passed by the CIT(A) is a well reasoned and elaborate order, on a closure scrutiny we find that substantial part of the order is verbatim extract of the assessment order, written submissions of the authorised representative of the assessee, a truncated portion of the Remand report submitted by the Assessing Officer, the rejoinder filed by the assessee to the Remand report and the argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has to set aside such a finding, there should have been some semblance of discussion on the said aspect. The CIT(A) states that the Assessing Officer has not brought any evidence to establish that the loss booked by the appellant as alleged was received back by the appellant in some other forms subsequently. It is not clear as to on what basis such an observation was made by the CIT(A). It was not the allegation that moneys came back to the assessee in some other form. Therefore, we are of the view that the CIT(A) was not justified in stating that the Assessing Officer was not justified in disallowing the loss. Ultimately, the CIT(A) deleted the addition. Aggrieved by the same, the revenue filed appeal before the Tribunal. Once again we face the same problem of going through the order passed by the Tribunal giving it an impression as if it is a detailed and reasoned order as we find that substantial portions of the order are extracts of what has been done by the CIT(A) while granting relief to the assessee. The discussion on the said issue is in paragraph 15 of the order passed by the Tribunal. Once again the Tribunal committed an error of observing that the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in paragraph 5.2 of the order. The CIT(A) states that the Assessing Officer upon verification of the transactions treated the loss as speculative loss as the transactions were intra-day and no delivery of shares were taken place. Further, the CIT(A) records that the assessee has admitted the said findings that the loss was speculative in nature. Therefore, the CIT(A) affirms the order passed by the Assessing Officer that the loss from share transactions of Rs. 37,95,659/- is taken as speculative loss. However, whether the revenue preferred appeal before the Tribunal on the said issue, it appears that appeal was preferred because the revenue was of the opinion that the CIT(A0 has treated the transaction not to be bogus. However, on reading of paragraph 5.2 of the order, passed by the CIT(A), we find that no such finding recorded except to confirm the finding of the assessing officer that it is a speculative loss. In fact, in the written submission filed by the assessee before the CIT(A), they have not pressed the said ground. Therefore, in our view, no appeal need to have been preferred as against the said finding as the finding rendered by the Assessing Officer stands confirmed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred appeal before the CIT(A), before whom the assessee is stated to have produced certain documents and other evidence. A remand report was called for from the assessing officer on such documents who, on considering the same, stated that the charges claimed by the assessee are bogus. He further stated that a letter dated 16th August, 2010 was sent to M/s. Onkar Management Pvt. Ltd. to verify the authenticity of the agreement submitted for the first time before the CIT(A) and the letter was returned by the postal authorities as unserved . It appears that the authorised representative filed a letter dated 10 th September, 2010 giving a complete postal address of M/s. Onkar Management Pvt. Ltd. and a letter was issued to the said company to confirm the said document and reply was received confirming the payment of coordination charges. Further, the assessing officer stated that a letter dated 17th August, 2010 was also sent by the Inspector to Shri P. K. Dutta, Notary Public, for confirmation of the agreement and the inspector, in his report confirms the entry in the register. After having said so, the assessing officer reiterates his earlier finding that the claim is bogus. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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