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TMI Blog2025 (1) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the very basis of the reopening fails and therefore, it is adequately clear that the reopening has been made on the basis of information received without any independent verification and application of mind and is a case of in fact borrowed satisfaction, which is not permissible under the Act. The case of the assessee is supported by the decision of Meenakshi Overseas [ 2017 (5) TMI 1428 - DELHI HIGH COURT] . Thus, we are inclined to hold that the reopening of assessment has been made invalidly and is bad in law. Decided in favour of assessee. - Shri Rajesh Kumar, AM And Shri Pradip Kumar Choubey, JM For the Assessee : Shri Suni l Surana, AR For the Revenue : Shri Prabhakar Prakash Ranjan, DR ORDER PER RAJESH KUMAR, AM: This is an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served upon the assessee during the assessment proceedings. The assessee furnished the details/ information/ evidences comprising Profit and Loss account, balance sheet, etc. and covers notes. The ld. AO on the basis of said information furnished by the assessee observed that the assessee has disclosed the speculation profit of ₹ 6,682.12/- the details whereof are as under:- F O/ speculation Share Loss from Fort Comtrade Pvt .ltd. (-) ₹ 9344927.36 F O /Speculation Share Profit from Shree Krishna Bhatter ₹ 9,05,925/- Commodity Profit from Kali Commodity Private Limited ₹ 84,45,684.48/- Net Speculation Profit Shown as income in the income tax return ₹ 6682.12 04. The ld. AO in order to verify transactions, also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO observed that these transactions were also not substantiated by the assessee. The ld. AO further noted that the assessee has made transactions through Fort Comtrade Pvt. Ltd. in F O segment and incurred losses of ₹ 93,44,927/-. The AO issued notice u/s 133(6) of the Act to Fort Comtrade Pvt. for furnishing the details, which were accordingly, furnished. The ld. AO on perusal of the said reply concluded that the assessee has traded in commodity derivative at MCX and MCDX Platform and as such as per the provisions of Section 43(5) of the Act, transactions were in commodity derivatives during A.Y. 2011-12 were speculative transactions and hence, the loss of ₹ 93,44,927/-, was speculation loss. Finally, after discussing the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-13. Accordingly, the claim of the set set off speculative loss of Rs. 9344927/- with non-speculative incomes of Rs. 905925/- and Rs. 8445684/-(both being assessed u/s68 of the Act) is hereby rejected and consequently an addition of Rs. 9344927/- is hereby made to the total income of the assessee for Ay.2012- 13. 06. The ld. Counsel for the assessee at the outset submitted that the reopening of assessment by the ld. AO is invalid and void ab initio as the same is based on the information received by the ld. AO from DDIT-Investigation, Kolkata without any independent verification and application of mind and thus, is a patent case of borrowed satisfaction. The ld. Authorized Representative submitted that the case of the assessee was reopened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Kapoor 299 ITR 179 5. CIT Vs. Paramjit Kaur 311 ITR 38 6. CIT Vs. Shiv Shakti Flour Mills Pvt. Ltd. (2010) 327 ITR 430 (Gauhati) 7. CIT Vs. Insecticides (India) Ltd. (2013) 357 ITR 330 (Delhi) 8. Signature Hotels (P) Ltd. Vs. ITO 338 ITR 51 (Delhi) 07. The ld. authorized Representative therefore prayed that in view of the above facts and the decisions of various judicial forums, the reopening of assessment may kindly be quashed. 08. The ld. DR on the other hand, submitted that the reasons were recorded based on the information received from DDIT Investigation, Kolkata that assessee is a beneficiary of bogus commodity profits through M/s Kali Commodity Pvt. Ltd. to the tune of ₹ 20 lacs which has escaped assessment and submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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