TaxTMI 
TaxTMI 
2018 (8) TMI 525
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....aim for deduction under that head impermissible. He held:- "From the return it has been found that the assessee has claimed loss in commodity trading of Rs. 2,26,96,157/-. On enquiry, the stock exchange NMCE (National Multi Commodity Exchange) reported that the transactions were not done in the name of this party and the broker through which the assessee said to have done the trading has been expelled by the NMCE after the broker Vatika Merchants(P) Ltd. was found to had involved in issuing forged and fraudulent contract notes. In reply to the show cause that why it should not be treated as bogus, it has been submitted that "...As all these transactions are off market transactions, the same may not have passed through the commodity exchan....
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.... enquiry the Commodity Exchange i.e. National Multi Commodity Exchange (NMCE) reported that transactions were not recorded in the name of the appellant i.e. M/s. BLB Cables & Conductors Pvt. Ltd. C) The broker i.e. M/s. Vatika Merchants(P) Ltd. was also expelled by the NMCE since the broker was found indulging in issuing fraudulent contract notes. D) The information "whether the appellant has ever entered into commodities trading in the last or next three years, if yes, result thereof. Does the Director in individual capacity or otherwise ever entered into commodity exchange prior or later to these transactions" was not given during appellate proceedings in spite of number of opportunities. E) The original Books of Accounts, stock reg....
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....al reserve in violation of the accounting standards and legal requirements of section 115JB and the companies Act, 1956. L) The appellant knows that very few returns are selected for scrutiny assessments. M) The non submission of information and avoiding verification by writing that it had already filed written submissions with enclosures at the time of first hearing and thereafter and that no further papers or clarification need be filed by it. Further, asking to decide the appeal on the basis of submissions already filed by submitting a letter in dak" 3. In the appeal filed by the assessee, the Tribunal, however, held that there is no bar in undertaking off market transactions in commodities under the law. On the aspect of proving su....
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....e paper book. On the other hand the ld. DR relied in the order of the lower authorities. 4.1 From the aforesaid discussion we find that the assessee has incurred losses from the off market commodity transactions and the AO held such loss as bogus and inadmissible in the eyes of the law. The same loss was also confirmed by the ld. CIT(A). However we find that all the transactions through the broker were duly recorded in the books of the assessee. The broker has also declared in its books of accounts and offered for taxation. In our view to hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence. Here in the case the transactions of the commodity exchanged have....