TaxTMI 
TaxTMI 
2016 (5) TMI 1219
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....ed cash credits of Rs. 25,93,000/- and disallowance of the assessee's claim for short term capital loss of Rs. 17,60,242/-. 2.2 Aggrieved by the order of assessment for A.Y. 2009-10 dated 22.12.2011, the assessee preferred an appeal before the CIT(A)-24, Mumbai. The learned CIT(A) disposed the assessee's appeal vide the impugned order dated 27.03.2014 allowing the assessee partial relief. In the impugned order, the learned CIT(A) upheld the addition of Rs. 25,93,000/- in respect of unexplained cash deposits with Corporation Bank, Mandvi , Mumbai and partly allowed the assessee's claim of loss from futures and options at Rs. 15,03,455/- instead of Rs. 17,60,242/- as business loss under section 43(5) of the Act which is allowed to be set off as per the provisions of section 70 to 79 of the Act. 3. Aggrieved by the order of the CIT(A)-34, Mumbai dated 27.03.2014 for A.Y. 2009-10, the assessee has preferred this appeal before the Tribunal raising the following grounds: - "1. The Ld. Commissioner of Income-tax (Appeals)-24, Mumbai [hereinafter referred as "CIT(A)"] erred in passing the order dated 27.03.2014 confirming the action of Ld. A.O in making following the additions and disa....
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....ciating the facts and circumstances of the case. The Appellant, therefore, prays that the disallowance of Short Term Capital Loss is not at all justified. Hence, the same may be deleted. (ii) The Ld. CIT(A) failed to appreciate that during the course of the assessment proceedings, the Appellant has furnished all the relevant details called for, to prove the genuineness of Short Term Capital Loss incurred by the Appellant. Thus, disallowance of Short Term Capital Loss amounting to Rs. 17,60,242/- merely on conjectures and surmises is not at all justified. Hence, the same may be deleted. 5. The Appellant denies any liability to pay interest under section 234B and section 234C of the Income tax Act 1961. Hence the same are not leviable. 6. The appellant craves leave to add, alter, amend, delete or rescind any of the grounds of appeal mentioned hereinabove." 4. This appeal was fixed for hearing on various dates. On one occasion, the case was adjourned at the request of the learned D.R. for Revenue and on the other dates of hearing none was present for the assessee. We find that even the notices for hearing issued by RPAD have returned unserved. On 23.05.2016, when the case w....
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....substantiated by supporting evidence. 6.2.1 The learned D.R. referring to the impugned order submitted that the assessee's submissions at para 4.2 thereof was duly considered by the learned CIT(A) while rendering his findings. The learned CIT(A) observed that while the assessee maintained regular books of account for his business concern, M/s. Blue Impex, engaged in the business of exporting goods and got them audited, the transactions of cash deposits in the assessee's account in Corporation Bank, Mandvi, Mumbai and in respect of futures and option transactions were neither disclosed or reflected in his returns of income nor were they got audited inspite of the transactions running into crores of rupees. The learned D.R. submitted that in these circumstances the learned CIT(A) concluded that the assessee's explanation in respect of the cash deposits in the undisclosed bank account in Corporation Bank amounting to Rs. 25,93,000/- was not satisfactory to explain source of the same and therefore upheld the addition thereof. The learned D.R. submitted that in view of the above, the finding in impugned order of the learned CIT(A) on this issue be upheld. 6.3.1 We have heard the submis....
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....and another set of personal accounts of which transactions are partially reflected in the pass book of savings bank account of assessee with Corporation Bank, Mandvi, Mumbai and these entries/transactions do not figure anywhere in the business books of the assessee in the name of Blue Impex. Assessee has also not got his accounts in respect of future and options transactions as well as share purchase and sale transactions audited from a tax auditor even though the volume of transactions run into crores of rupees. 4.3.4 Assessee has shown cash sales totalling Rs. 25,93,000/- from time to time and these are reflected in the sales register and the total gross sales of Rs. 54,11,64,156/- and net sales of Rs. 50,39,11,658/- are reflected in the P&L Account and the Balance Sheet of the assessee and these are also audited by the auditors. Even though the cash sales of Rs. 25,93,000/- are reflected in the total sales of Rs. 54,11,64,156/ 50,39,11,658 in accounts and cash and bank balance figures of the business accounts in the name of Blue Impex tally, the entries of transfer of cash totalling Rs. 25,93,000/- exactly tally with the requirement of cash of the assessee to make payment to ....
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....flected either as a loan/advance or a reduction in capital with Blue Impex, 4) Share Trading Loss of Rs. 17,60,242/- which occurred on account of trading in shares was not disclosed in the return of income, 5) names of the purchasers of goods are not available with the assessee 6) assessee could have earned more by exporting these goods and assessee has not been able to identify the goods sold. This clearly indicates that assessee has manipulated his accounts and whenever he needed cash, he has disclosed the amount required as cash sales in his business books and immediately gone ahead with transferring cash from his business accounts to his savings account with CBMM, however, these transactions were not reflected in business accounts which were audited by the tax auditor. It is once again repeated that the savings bank account with CBMM does not form part of assessee's business accounts of Blue Impex and the personal accounts of the assessee with CBMM and Broker/ Middleman/Agent are not audited even though transactions run into crores of rupees and were made in more than 100 companies. Even though, assessee has maintained accounts meticulously and entries of cash transactions ....
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....he findings of the learned CIT(A). 7.3.1 We have heard the learned D.R. at length and perused and carefully considered the impugned order of the learned CIT(A). The learned CIT(A), after considering the submissions of the assessee and relevant provisions of law, has held as under at para 5.1 of the impugned order: - "5.1 Decision:- Assessee has submitted in ground No. 4 of the assessment order that AO has not allowed set off of net business loss of Rs. 9,66,297/- (Business Loss of Rs. 15,03,455- minus Business Profits of Rs. 53,71,580/- against the addition of Rs. 25,93,000/- made under section 68 of I.T. Act, 1961 and the Assessing Officer has erred in denying the same. First of all the income of Rs. 25,93,000/- is assessable to tax under section 69 of I.T. Act, 1961 which is enshrined in chapter VI of I.T. Act, 1961 and each section starting from 68, 69, 69A, 69B and 69D of I.T. Act, 1961 is a separate head of income in itself and income taxed under each one of these sections is taxable as 'Income of the assessee of that previous year/financial year' and provisions of section relating to set off of and carry forward of losses from one head of income mentioned in section 70 ....
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....ntends that the action of the AO in disallowing the short term capital gains (STCL) of Rs. 17,60,242/- is not justified, as he had furnished all the relevant details to establish the genuineness thereof. 8.2 The learned D.R. supported the finding of the learned CIT(A) in the impugned order in disallowing the STCL of Rs. 2,56,787/- out of Rs. 17,60,242/- claimed by the assessee, as no material evidence has been brought on record to controvert the findings of the learned CIT(A) that the business loss from futures and options is to be treated as Rs. 15,05,455/- and allowed to be set off as per sections 70 to 79 of the Act. 8.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record. It is seen that the learned CIT(A), after considering the submissions of the assessee, has held as under at paras 6.1 to 6.1.5 of the impugned order: - 6.1 Decision:- 6.1.1 Assessee has disputed the disallowance of short term capital loss Rs. 17,60,242/- on the ground that the assessee had submitted all the details in respect of these share transactions of purchase and shares totalling Rs. 9,35,75,657/- (Purchases/Rs.9,18,15,220/- (Sales) which were m....
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..../- from futures and options in the return of income. During the assessment proceedings, assessee's CA had furnished details of Rs. 17,60,242/- in respect of transactions in shares and securities which were not disclosed in the return of income and it is the claim for this loss of short term capital loss of Rs. 17,60,242/- was disallowed by the Assessing Officer. 6.1.4 The transactions in futures and options which resulted in loss of Rs. 15,03,455/- and which was shown as a business loss of Rs. 15,03,455/- in the return of income, were not reflected in the P&L Account and Tax Audit Report which mention only about trading in readymade garments and textiles and only the net profit of Rs. 5,37,157/- is reflected in the P&L Account of the assessee and the so called net loss of Rs. 15,03,455/- in futures and options is also not reflected either in the P&L Account or in the capital account of the assessee. Moreover, if the business loss in futures and options of Rs. 15,03,455/- was incurred the assessee would have made payment of Rs. 15,03,455/- to the person/party who made transactions in futures and options on assessee's behalf and if so assessee would have made payment to th....
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....ifferent from the loss of Rs. 15,03,455/- in futures and options, is also not valid because the entries for the same are not reflected anywhere in business accounts which are audited and is also not reflected in the savings account with Corporation Bank, Mandvi, Mumbai, and if it were so, the loss of Rs. 15,03,455/- will be taxable under section 69/69C of I.T. Act, 1961 and, therefore, the alternate contention made during the appellate proceedings is also rejected on facts and in law. 6.1.5 Prima facie, this loss of Rs. 17,60,242/- which was denied as short term capital loss of Rs. 17,60,242/- in the computation of total income worked out by the Assessing Officer in the assessment order, was nothing but the business loss of Rs. 15,03,455/- in futures and options claimed in the return of income with the difference of Rs. 2,56,787/- (17,60,242 - 15,03,455) was either a component which was not disclosed in the computation of revised loss Rs. 17,60,242/- in the assessment/ appellate proceedings or loss/expenses of Rs. 2,56,787/- which was wrongly claimed. Assessee has failed to furnish the details of this difference of Rs. 2,56,787/- and since these transactions were not subjected to a....