TaxTMI 
TaxTMI 
2015 (5) TMI 270
X X X X Extracts X X X X
X X X X Extracts X X X X
....C) Whether on the facts and in the circumstances of the case the learned Tribunal was right in law in not appreciating the facts that this is a case of only gross profit addition of Rs. 1,88,750/- even if loss of Rs. 56,99,495/- is not believed? (D) Whether on the facts and in the circumstances of the case, the learned Tribunal has justified in not allowing the set off of addition of Rs. 14,19,919/- as against the loss incurred of Rs. 56,99,495/- (without prejudice)? [2.0] The assessee claiming to be engaged in the business of dealing in shares and derivatives (Future & Option) during the year besides the business of textile trading activities filed the return of income for the Assessment Year 2008-09 declaring the total income at Rs. 2,95,019/-. The case was process under Section 143(1) of the Income Tax Act (hereinafter referred to as the "Act") and subsequently the case was selected for scrutiny and notice under Section 143(2) of the Act was issued on 28/08/2009. During the course of the assessment and on the basis of the AIR information it was found that the assessee was holding a bank account with Prime Co-operative Bank Ltd, Main Branch, Khatodra, Surat and had deposite....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ged loss of Rs. 56,99,495/-. [2.4] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the assessee has preferred the present Tax Appeal with the aforesaid proposed substantial questions of law. [3.0] Shri Ketan Shah, learned advocate appearing on behalf of the assessee has vehemently submitted that the learned Tribunal has materially erred in confirming the order passed by the learned CIT(A) with respect to the claim of the assessee with respect to loss of Rs. 56,99,495/-. It is further submitted that the learned Tribunal has not properly appreciated the fact that as such the assessee had discharged the onus for incurring the loss in reference to the share transactions of F & O by way of furnishing contract note, address and PAN No. of the respective two parties with whom the transactions were done. It is submitted that since the appellant had discharged the onus regarding the loss incurred of Rs. 56,99,495/-, the learned Tribunal ought not to have worked out the peak as well as the profit at the rate of 5%. [3.1] It is submitted that even otherwise since the the addition made at Rs. 14,19,919/- is against the loss incur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espite opportunity granted by A.O., the appellant could not provide even the names / addresses of alleged persons who advanced cash to him. The appellant failed to explain the sources of cash deposit in bank account. Thus, there is no dispute that cash deposited in bank is unexplained. This being so, the action of A.O. in making addition of Rs. 37,75,000/- to the income of assessee is justified. A.O.'s action is upheld and ground No.II is dismissed. Ground No.III is interlinked with Ground No.II, wherein the appellant has alleged that A.O. followed pick and choose method and focused only on unexplained cash deposit. The A.O., as alleged by appellant, did not consider the share transactions routed through this bank which resulted in net loss of Rs. 56,99,495/-. In this regard, appellant's submissions and A.O.'s arguments have been considered. Considering the totality of facts and circumstances and the provision of law, the action of the A.O. in disregarding appellant's claim of loss at Rs. 56,99,495/- is justified in view of the following:- i. The said loss has not been claimed in return of income as mandated law. ii. The appellant has not prepared any income / expenditu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment of account of bank in question was filed by the assessee before us. A perusal of the same shows that deposit of Rs. 37,75 lakhs was not made in the said bank account at a time, but, the same amount represents the aggregate amount of deposit, which was made in the said bank account during previous year. A perusal of the bank account shows that there were regular withdrawals from the said bank account itself. No material has been brought on record by the revenue to show why the withdrawals made from the same bank account could not have been available with assessee for making subsequent deposits in the bank account. In above facts, in our considered view, adoption of entire aggregate deposits during the year of Rs. 37.75 lakhs as income, by ignoring the withdrawals, was not justified. We find that the peak deposits in the said bank was Rs. 12,31,169.88 on 17.01.2008. Further, the frequency of deposit and withdrawal indicates that the assessee was carrying on certain undisclosed deposits. Therefore, it would be reasonable to estimate the said business income, and also to treat the same as business income of the assessee. We, therefore, estimate the assessee's profit from such busi....