9911796707
TMI Blog2024 (12) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... ire transaction is going through a process where delivery of goods take place and documents evidencing delivery of goods related to high sea sale are Bill of Lading which has not been disputed by the revenue authorities. We find that the chain of events as laid down by the assessee, supported by documentary evidences, has not been disputed by the AO. The only point of dispute is there is no evidence of actual delivery and merely because the assessee entered into a forward contract, the transaction was considered to be speculative in nature. It is not a case, where delivery of the goods were not contemplated at all, but it is a case where goods where physically purchased by the importer from the foreign seller, who loaded the goods on the ship, and thereafter, the assessee has purchased the goods from the importer while on the high seas in transit, and thereafter, the assessee sold the goods by handing over and transfer of title documents, in favour of the ultimate buyer, which includes handing over the sale invoice, High Seas sales agreement, copy of original import invoice, and copy of bill of lading to the purchaser, while the goods were still on high seas in transit and finally, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that other income of Rs. 3,11,142/- has been considered by the appellant while arriving at loss but, has erred in law and on facts in confirming the action of AO in considering the same as income from other sources. 3.2. The AO as well as Ld. Appellate Authority failed to appreciate that impugned other income mainly comprises of the export incentives excess provision written back which are part parcel of the business. 3.3. That in the facts and circumstances of the case as well as in law, the Ld. Appellate Authority ought not to have upheld the impugned other income as Income chargeable under other sources. 4. The Appellant craves, to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal. Brief facts of the case are as under: 2. The assessee is a company engaged in the business of trading of edible oils and soya and filed its return of income for your under consideration declaring loss of ₹ 10, 05, 28, 283/-on 18/09/2014. It is submitted that the return was processed under section 143 (1) of the act, and subsequently selected for scrutiny. Thereafter notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be speculative and the same was allowed to be carry forwarded to the next year to set-off against any speculative profit. 2.5. The Ld. AO also treated the income declared by the assessee under the head other income mainly comprising of export incentives and excess provision written of which were part and parcel of the activities of the assessee, as income from other sources. Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A) 3. The Ld.CIT(A) upheld the observations of the Ld.AO holding that, the assessee traded in edible oil on high seas under which delivery of goods is taken and given by the endorsement of document acknowledging the shipment of the goods, before it reaches the destination. The Ld.CIT(A) observed that in case of purchase by the assessee, the delivery of the goods by way of endorsement of bill of lading in its favour and in case of sales the assessee gives delivery of goods by transfer of documents. 3.1. The Ld.CIT(A) was of the opinion that the assessee thus has not shown any evidence of any physical purchase and sales of goods and that the transactions are on paper only. The Ld.CIT(A) thus relying on coordinate bench decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents to the title of goods as per section 2 (4) of The Sale of Goods Act 1930, that reads as under: document of title to goods include a bit of leading, talk warrant, warehouse keepers certificate, wharfinger s certificate was, railway received, warrant order for the delivery of goods and any other documents used in the ordinary course of the business as a proof to the possession or control of goods, or purporting to authorise, either by endorsement or by delivery, the possessor of the document to the transfer received goods thereby represented 5.5. He submitted that, as per the dictionary meaning, document of title is a document that enable the possessor to deal with the property described in it, as if, he were an owner. Placing reliance on the commentary on Central Sales Tax Laws by K.Chaturvedi at page 847, the Ld.AR submitted that, A bill of ladding is a writing signed on behalf of the owner of the ship in which the goods are embarked, acknowledging the receipt of the goods, and undertaking to deliver them at the end of the voyage subject to such conditions as the mentioned in the bill of leading The Ld.AR then referring to provisions of section 43 (5) of the act submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from profits and gains of business or profession. 43. In sections 28 to 41 and in this section, unless the context otherwise requires . (5) speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips: Provided that for the purpose of this clause: (e) an eligible transaction in respect of trading in commodity derivatives carried out in a recognised stock exchange, which is chargeable to commodities transaction tax under Chapter VII of the Finance Act, 2013 (17 of 2013), shall not be deemed to be a speculative transaction: Provided further that for the purposes of clause (e) of the first proviso, in respect of trading in agricultural commodity derivatives, the requirement of chargeability of commodity transaction tax under Chapter VII of the Finance Act, 2013 (17 of 2013) shall not apply. . Explanation 2. For the purposes of clause (e), the expressions (i) commodity derivative shall have the meaning as assigned to it in Chapter VII of the Finance Act, 2013; (ii) eligible transaction means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuation where there was successive sales of same commodity coupled with delivery or transfer of the commodity and the physical delivery is only taken by the ultimate purchaser, the transaction does not fall within the sweep of speculative transaction and the Hon'ble High Court observed as under: - For example, if A sells certain commodity to B and transfers possession of the commodity by parting with the commodity either by putting the commodity on the carrier, rail or any other transport, and on the way B, the purchaser, sells the commodity to some third party C, the purchase by the first purchaser B cannot, in our view, be treated as speculative transaction for the simple reason that the delivery or transfer of the commodity contemplated under clause (5) of section 43, has taken place. 6.5.1. Further, the Hon'ble High Court held that, under the sale of goods Act the delivery of goods can be made either by physical delivery of commodity directly to the purchaser or to the carrier for him or by transferring the documents of title to the commodity. The relevant extract reads as under: - 9. In view of the above discussion of case law with regard to the provisions of section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer, the transaction cannot be regarded as speculative transaction. 6.7. The Ld.AR, also relied on the decision of Hon ble Amritsar Bench of this Tribunal, in case of DCIT vs. GH Corp Science Pvt. Ltd reported in (2024) 265 taxmann.com 172, for assessment year 2017-18, where on identical facts the issue has been decided in favor of the assessee. 6.8. In the present facts of the case we find that the chain of events as laid down by the assessee, supported by documentary evidences, has not been disputed by the AO. The only point of dispute is there is no evidence of actual delivery and merely because the assessee entered into a forward contract, the transaction was considered to be speculative in nature. 6.9. It is not a case, where delivery of the goods were not contemplated at all, but it is a case where goods where physically purchased by the importer from the foreign seller, who loaded the goods on the ship, and thereafter, the assessee has purchased the goods from the importer while on the high seas in transit, and thereafter, the assessee sold the goods by handing over and transfer of title documents, in favour of the ultimate buyer, which includes handing over the sale invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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