Court directs reassessment of intraday trading, rejects loan addition under Section 68, appeal partly allowed.

The Court directed the CIT(Appeal) to reconsider whether the assessee's intraday trading transactions were jobbing transactions and if consideration had passed, instructing to call for a remand report. The Court found that the addition of loans under Section 68 was not warranted as the creditors' transactions were confirmed, creditworthiness established, and the assessee disclosed the true identity and creditworthiness of the creditor. As genuineness was inferred, the appeal was partly allowed based on these findings, with no substantial question of law arising.

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Issues:
1. Whether the assessee's loss on intraday trading in shares is speculative and liable to be treated as suchRs.
2. Whether interest-free loans secured by the assessee are liable to be added under Section 68 of the ActRs.

Issue 1:
The revenue challenged the ITAT's order regarding the assessee's loss on intraday trading and loans. The assessing officer treated the loss as speculative under Section 73(1) and added the loans back under Section 68. However, the CIT and ITAT disagreed, stating the transactions were not speculative, and the shares were purchased on a firm basis. The CIT(Appeal) found that the loss was not speculative, considering the evidence provided by the assessee, and directed to treat it as a normal business loss. The Court agreed that the matter should be reconsidered to determine if the intraday transactions were jobbing transactions and if consideration had passed, instructing the CIT(Appeal) to call for a remand report.

Issue 2:
Regarding the addition of loans under Section 68, both the CIT and ITAT examined the matter thoroughly. The creditors confirmed the transactions, and their creditworthiness was established. The assessing officer should have treated the amounts as income if deemed necessary, rather than proceeding under Section 68. The law mandates the assessee to disclose the true identity and creditworthiness of the creditor, which was done in this case. As the identity and creditworthiness were proven, genuineness was inferred. The Court found that both the CIT and ITAT acted in accordance with the law, and no substantial question of law arose in this regard. The appeal was partly allowed based on these findings.

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