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Issues: (i) whether the deletion of the addition made on account of disallowance of derivative loss from trades in currency futures and options for assessment year 2015-16 was justified; (ii) whether the deletion of the addition made on account of cash deposits during the demonetisation period for assessment year 2017-18 was justified.
Issue (i): whether the deletion of the addition made on account of disallowance of derivative loss from trades in currency futures and options for assessment year 2015-16 was justified.
Analysis: The assessee's claim of loss was examined against the backdrop of the investigation material, the SEBI findings, the statement of the broker, and the pattern of trading. The Tribunal held that the Assessing Officer had analysed the modus operandi in detail, including the short time gaps, the counterparty pattern, the role of brokers, and the character of the trades as pre-meditated and non-genuine. The reliance placed by the first appellate authority on earlier Tribunal decisions was found inapposite because the facts were materially different and the evidence in the present case supported the conclusion that the transactions were not genuine business trades.
Conclusion: The deletion of the addition was not justified and the disallowance of the derivative loss was restored in favour of the Revenue.
Issue (ii): whether the deletion of the addition made on account of cash deposits during the demonetisation period for assessment year 2017-18 was justified.
Analysis: The assessee sought to explain the cash deposits as sale proceeds of purchases from two parties, but the Tribunal found that the first appellate authority had granted relief mainly on the strength of case law and not on a proper appreciation of the factual record. The Assessing Officer's findings regarding the absence of supporting purchase evidence, the pattern of ledger entries, and the inconsistencies in the claimed transactions were accepted as demonstrating that the assessee had not substantiated the source and genuineness of the deposits.
Conclusion: The deletion of the addition was not justified and the addition on account of cash deposits was restored in favour of the Revenue.
Final Conclusion: Both substantive additions were upheld, the assessee's cross objections failed, and the Revenue succeeded in both appeals.
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