AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 768
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....ounsel for the appellant submits that as the appellant disclosed an income of Rs.25,25,120/-, including Rs.11,19,765/-, as commodity income, the Assessing Officer as well as the Income Tax Appellate Tribunal have erred in holding that as this amount does not relate to income as defined under Section 14 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), it has to be considered as income under section 68 of the Act. It is further argued that Rs.11,94,315/- shown as "commodity income" falls within the definition of "income from other sources" as defined under section 14 of the Act. The expression "income from other sources" is to be assigned a wide meaning, whereas the respondent has assigned a narrow meaning by ignoring relev....
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....ase, the source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of and definite return of income? Counsel for the revenue, however, submits that the income shown as "commodity income" was a sham transaction, not relatable to any business activity was, therefore, rightly excluded from "income from other sources". It is further submitted that as the Income Tax Appellate Tribunal has considered the provisions of Sections 14 and 68 of the Act and only thereafter recorded findings against the appellant. The substantial question of law framed by the appellant does not arise for consideration. The appeal may, therefore, be dismissed. We have heard counsel for the parties, ....
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....2005-06, explanation offered by it about the nature and source thereof is not satisfactory, the sum so credited (Rs.11,94,315/-) has to be charged to income tax as the income of assessee company of previous year 2005-06 relevant to A.Y. 2006-07 U/s 68 of the I.T. Act, 1961." XX XX XX XX XX XX XX XX XX XX XX XX In the present case the nature and source of income from derivative trading of Commodities remains bogus. Mensria of assessee is proved beyond doubt. Assessee is hand in gloves - with broker/dealer and it has made conscious efforts to introduce its income from undisclosed sources in the garb of bogus profit from trading of derivative commodities. The broker notes are bogus, the entire transaction is a sham, assessee has not been a....
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....same source. As already stated earlier, the assessee has claimed deduction for a sum of Rs.74,550/- representing loss form derivating trading in commodities against the total profits amounting to Rs.11,94,315/-. The loss claimed by the assessee from derivating trading was disallowed by the AO, which, on appeal, has been confirmed by the CIT(A) with the following observations:- "7.41 While dealing with above mentioned grounds of appeal it has been held that the transactions of the appellant with the broker in respect of earning the income from trading in derivatives of commodity were genuine. For deciding as above most important fact which was considered was that the transactions resulted in income which has been accordingly disclosed in t....
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....t the disputed income would fall under the head "income from other sources" and not under Section 68 of the Act, the Tribunal held as follows:- " Thus what is taxed under Chapter IV is income from a known source including income from other sources. A source of income means a specific source from which a particular income springs or arises. Once a source giving rise to a particular income is identified, it has then to be placed under a particular head of income as specified in section 14. Thus income can be taxed under a specific head of income as enumerated in section 14 only when it is possible to peg the same to a known source/head of income. If the nature and source of a particular receipt is not known, it cannot then be pegged to a kno....
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....s recorded by the Assessing Officer as well as the Income Tax Appellate Tribunal, leave no ambiguity that Rs.11,19,765/- claimed by the appellant as commodities income is not relatable to the business of the appellant and as held by the Assessing Officer, duly affirmed by the Income Tax Appellate Tribunal and is a sham transaction, recorded with the sole object of evading tax by claiming this amount as income from other sources. The appellant was unable to satisfactorily explain his dealings with M/s Shivam Commodities Services Limited as bills and other documents produced, did not inspire confidence and were rejected. A perusal of findings recorded by the Assessing Officer reveals that the matter was considered in a great degree of detail....