TaxTMI 
TaxTMI 
2022 (7) TMI 843
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.... AO"] u/s 143(3) of the Income-tax Act, 1961 ["the Act"] for the Assessment-Year 2015-16. 2. The assessee has raised following ground: "(1) The Commissioner of Income-tax has erred on facts and law, in confirming addition of Rs. 8,12,571/-. The same being unjust and unlawful may please be directed to be deleted." 3. The assessee is earning income from day-trading of stock market, Future & Option (F&O) transactions and interest. The assessee filed Return of Income on 19.03.2016 declaring a total income of Rs. 5,20,033/- which included business income of Rs. 97,666/- u/s 44AD. The case was selected for scrutiny and the statutory notices u/s 143(2) and 142(1) were issued from time to time. Finally, the assessment was completed u....
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....had closing stock of 1,000 Nos. of ICICI and 375 Nos. of INFY. 7 The assessee purchased 15 Nos. of Silver commodity on 30th April, 2015 which does not relate to the previous year 2014-15 relevant to assessment-year under consideration. Although the assessee submitted to the Ld. AO that the differences are on account of outstanding open contracts of F&O yet the Ld. AO treated the differences as closing / opening stocks of the assessee. The Ld. AO, therefore, made re-working of purchase, sales, cost and profit of the F&O transactions and thereby computed an additional income of Rs. 8,12,571/- made addition to that extent. The detailed working are given in the assessment-order, which are not being reproduced for the sake of brevity. ....
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....uity Stock Futures and Options). • Our actual loss form F&O business is (Rs.-132254.00) which is also reflected in the financial wise summary issued by the Max Stock Broking Pvt. Ltd. • Our plea to you is that the Ld. AO has erred in treating the assessee's business as a normal trading activity and has prepared the opening stock and closing stock like the normal trading business, instead of using mark to margin account balance. • Further, in the case of ITAT-Mumbai, Edelweiss Capital Ltd. Mumbai on 12.08.2010, the same issue arose and the Ld. Bench took the cognizance of the ICAI Guidance note as well as refer the Supreme Court Judgement in the case of Chainrup Sampatram vs. CIT, West Bengal, whereby t....
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....tailed working at para 2 to 7 of assessment order clearly shows market to margin balance that has been considered to arrive profit/gain earned in appellant's business of grading. AR has failed to controvert the findings of the Assessing Officer with factual justification. Therefore, I don't need to interfere with the order passed by the Assessing Officer. Addition in this count is hereby upheld. This ground is dismissed." 7. Before us, the Ld. AR opened his argument by explaining the methodology and treatment of F&O transactions. The Ld. AR submitted that in F&O transactions, there occurs two events, viz. (i) Purchase, and (ii) Sale at two different timings. According to Ld. AR, the sequence of "purchase" and "sale" could be any, i.e. pu....
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.... which we present below: Page No. of Paper-Book F&O Scrip Transaction appearing in the Statement 5 NIFTY 23Apr14 Opening Position 50 Nos. @ 6739.65 for Rs. 3,36,982.50 1 Bajaj-Auto 30Apr15 Purchased on 16/03/2015 - 125 Nos. @ 2080.01 for Rs. 2,60,001.25 2 Cipla 30Apr15 Purchased on 27/03/2015 - 500 Nos. @ 699.02 for Rs. 3,49,510.00 2 Dr. Reddy 30Apr15 Sold on 31/03/2015 - 125 sold @ 3525.29 for Rs. 4,40,661.25 3 Grasim 30Apr15 Purchased on 20/03/2015 - 125 @ 3609.91 for Rs. 4,51,238.75 The Ld. AR submitted that these illustrative transactions would suffice to explain the facts. According to the Ld. AR, the first transaction demonstrates that there was an open outstanding transactio....
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....le ITAT Mumbai in DCIT Vs. Edelweiss Capital Ltd. ITA No. 5587/Mum/2018 dated 25/10/2019. However, the Ld. AO has reworked profit by treating the open outstanding transactions of purchase / sales as closing / opening stock and thereby enhanced taxable income. The Ld. AR submitted that unlike a normal trading business, there cannot be any closing stock / opening stock in F&O transactions and this aspect is not understood by the lower authorities. Ld. AR also submitted that even the Ld. CIT(A) has not considered the submissions of assessee properly and carefully, he has simply supported the approach of Ld. AO. Therefore, according to the Ld. AR, the approach of the lower authorities in justifying the addition of Rs. 8,12,571/- is not correct.....