TaxTMI 
TaxTMI 
2015 (9) TMI 233
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....ion to the assessment of profit from commodity trading as cash credit under Section 68 of the Income Tax Act. The assessment order itself show that it was found from the Profit and Loss Account that a sum of Rs. 5,13,55,093/- was found credited in the books of accounts of the assessee as commodity trading profit allegedly received from M/S Vatika Merchants Private Limited. The said income was adjusted/set off by the assessee against business losses for the year in question. In response to the request of the Assessing Officer for production of confirmation, the assessee vide letter dated 21.1.2013 filed a copy of accounts of M/S Vatika Merchants Private Limited for the financial year relevant to the assessment year 2010-2011. This was examin....
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....of receipt of profit from commodity trading is a sham or bogus one. Further as per Sec.68 of the Act, it is the responsibility of the assessee to explain about the "Nature and source" of any sum found credited in the books of accounts. Hence we are of the view that the assessing officer has rightly assessed the same as cash credit u/s 68 of the Act." 2. After holding so, the Tribunal examined the illegality of the rejection of the claim of the assessee to set off of business loss and carry forward business loss/depreciation. Thereafter, distinguishing the case of Fakir Mohmed Haji Hassam v. CIT (2001) 247 ITR 290 relied on by the Assessing Officer to deny this claim and relying on the judgment of the Calcutta High Court in Daulatra....
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....loss/unabsorbed depreciation against the same in accordance with the relevant provisions of the Act." 3. On that basis the Tribunal set aside the order of the First Appellate Authority and directed the Assessing Officer to allow the set off of current years business loss as well as brought forward losses/unabsorbed depreciation against the income assessed in accordance with the provisions of the Income Tax Act. It is aggrieved by this order of the Tribunal that the Revenue has filed this appeal. The main question of law raised by the Revenue is whether on the facts and circumstances of the case, since the income determined under Section 68 does not fall under any head in Section 14 is not such an income beyond Section 70 which deals with....
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....d income cannot be treated as business income under any one of the head provided under Section 14 in which case the question of set off does not arise. 7. Insofar as the Supreme Court judgment in Lakhmichand Baijnath v. Commissioner of Income Tax, West Bengal (1959) 35 ITR 416 relying on which the Calcutta High Court has rendered its judgment in Daulatram Rawat Mull v. CIT (64 ITR 593) is concerned, reading of the judgment itself show that the disputed income therein was assessed by the Assessing Officer as concealed profits of the business. This finding of the Assessing Officer was confirmed by the First Appellate Authority, Tribunal, High Court and the Supreme Court. Therefore, the decision rendered on the basis of such a conclus....