TaxTMI 
TaxTMI 
2021 (1) TMI 622
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....the tune of Rs. 39,91,078/- was made through one broker namely M/s. Kayan Securities Pvt. Ltd. (in short 'M/s. KSPL) and according to the AO information was available with him that one of the directors Shri Harshvardhan Kayan of M/s. KSPL through which company the assessee has transacted the F&O has admitted in his statement recorded u/s. 133A of the Income-tax Act, 1961 (hereinafter referred to as the "Act") on 28.01.2015 that this company M/s. KSPL has indulged in providing bogus Long Term Capital Gain (in short LTCG). Thereafter, in the assessment order he reproduced certain portions of the statement of Shri Harshvardhan Kayan as under: "Q.9. Please explain the business activity of the above mentioned jamakharchee companies. Ans. The companies are engaged in providing accommodation entry in different forms as bogus long term capital gain or loss. .. Q.14. Please explain the details of business activity done by M/s. Kayan Securities Pvt. Ltd., M/s. Ashok Kumar Kayan. Ans. The main business activity is that of buying and selling of share and securities commissioned earned by the through various "jamakharchee companies" registered with u....
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....e online and so the assessee's contention that the scrip/derivatives were transacted through recognized stock exchange with CTT paid and transactions were done through on-line with payments and receipt made through banking channel cannot come to the aid of the assessee and , therefore, he treated the loss from F&O as nothing but bogus and added back Rs. 29,65,952/-Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who confirmed the same. Aggrieved, the assessee is before this Tribunal. 6. I have heard rival submissions and gone through the facts and circumstances of the case. I note that the assessee is into rubber manufacturing/tyre related business. Assessee had shown total income of Rs. 16,50,480/-. During the scrutiny proceeding, the AO noted that the assessee had debited loss on account of F&O trading to the tune of Rs. 29,65,952/-. From the details filed in respect of this claim of loss, the AO noted that the assessee had transacted F&O business to the tune of Rs. 39,91,078/- through one broker M/s. KSPL and according to AO, one of the directors of M/s. KSPL Shri Harshavardhan Kayan has admitted during survey u/s. 133A of the Act on 28.01.2015 that thi....
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....ith the transactions regarding F&O and there is no whisper in these statements which casts any wrong doing on the part of assessee. Therefore, according to Ld. A.R, the statements of both these persons are not incriminating against the assessee in any manner. Further, according to Ld. A.R, statement of both these persons cannot be relied upon for various other legal infirmities like the statements were recorded during survey and in violation of Natural justice. According to the Ld. AR, the AO himself admits in the assessment order that the statements of Shri Harshavardhan Kayan as well as Shri Mukesh were recorded u/s. 133A of the Act (survey) and the Hon'ble Supreme Court has held in CIT Vs. S. Kader Khan & Son (2013) 352 ITR 480 (SC) that survey statements are weak evidence and cannot be the sole basis on which adverse findings can be drawn against the assessee. Further according to the assessee, the statement of Shri Harshavardhan Kayan as well as that of Shri Mukesh Agarwal cannot be relied upon because the assessee was not given an opportunity to cross examine these two persons, and since their statements have not been tested on the touch-stone of cross-examination, the veraci....
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....ssessee's transactions with the so called jamakharchi companies referred to by these two persons. The AO failed to expose any dealing by the assessee company through its broker M/s KSPL with these so called jamakharchi companies referred to by these two persons. The AO has neither summoned these persons (Shri Harshvardhan Kayan and Shri Mukesh Agarwal) and himself questioned them. It is noted that without bothering to even summoning them and questioning them, the AO by extracting selectively certain portions of their statement [which does not even say anything about F&O transaction], had drawn adverse finding against the assessee. In this background, the question is whether this statement of Shri Harshavardhan Kayan as well as that of Shri Mukesh Agarwal can be a basis to draw adverse inference/finding against the assessee in respect of its claim of loss suffered in F&O transactions. According to me, the assessee had discharged its primary onus in proving the transaction on F&O by producing the corroborating evidence before the AO/Ld. CIT(A). Both the authorities could not find any infirmity on these documents. However, the AO discarded the primary documents produced by the a....