TaxTMI 
TaxTMI 
2023 (4) TMI 272
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....d against the assessment order by DCIT, Circle-10(1), Kolkata u/s. 147/143(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), dated 16.12.2017. 2. Grounds raised by the revenue are reproduced as under: "1] That on the fact and circumstances of the case, the Ld. CIT(A)-4, Kolkata erred in deleting the addition of Rs. 2,99,85,863/- u/s. 68 of the Act by wrongly holding that what could be added even in case of bogus or contrived transaction is net result of purchase and sale and not the entire sales, without appreciating material facts and evidences of this case. 2] That on the facts and circumstances of the case, the Ld. CIT(A)-4, Kolkata erred in deleting addition of Rs.5,76,752/- (Rs.5,99,755 (-) Rs.....
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.... (NMCE), Ahmedabad. The said return was processed u/s. 143(1) of the Act vide intimation dated 12.02.2011, which was subsequently rectified u/s. 154 of the Act with the last order passed u/s. 154 dated 20.07.2016. Subsequently, a notice u/s. 148 of the Act dated 31.03.2017 was issued on the assessee and served thereon. Assessee filed its return in response to the said notice u/s. 148 reporting total income at nil. Ld. AO observed that assessee had derived speculative income from commodities through member/broker of NMCE, Fast Track Marchants Pvt. Ltd. Ld. AO further noted that trades were executed with the counter-party clients M/s. Fairdeal Vincom Pvt. Ltd. and M/s. Anand Share Broking (P) Ltd. Assessee submitted copy of contract notes, ba....
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....spect of total sale proceeds. He further estimated a commission @ 2% on the said amount and added it by disallowing u/s. 37(1) of the Act. Aggrieved, assessee went in appeal before the ld. CIT(A). 3.2. Before the Ld. CIT(A), assessee reiterated the submissions, the details in respect of the transactions under taken by the assessee is tabulated below: Contract No. Date Difference being Profit/Loss Net of Brokerage & S. Tax (Rs.) Brokerage (Rs.) Service Tax (Rs.) 00000379/0910 21.07.2009 4,98,719,58 1,376.50 142.92 001378/0910 24.02.2010 4,98,900.61 1,450.00 149.39 001560/0910 12.03.2010 1,52,531.23 425.00 43.77 Total 11,50,151.42 3,262.50 336.08 3.3. In r....
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....what to be added even in case of bogus or contrived transaction is, the net result of purchase and sale, and not the entire sales. Ld. CIT(A) also noted that assessee has already shown the net result of purchase and sale of commodities transaction as income in its return and thus deleted the addition of Rs.2,99,85,863/-. However, Ld. CIT(A) directed the ld. AO to compute commission on the commodity transaction by taking 2% of the net speculative income reported by the assessee as against what Ld. AO took as 2% of the total sales value. Further, Ld. CIT(A) while disposing ground no. 10 in respect of allowing set off of brought forward loss and depreciation noted that the commodity profit has been held to be bogus. For the purpose of allowing....
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.... as desired by the beneficiary party. He thus, strongly supported the order of Ld. AO. 4.1. Per contra, Ld. Counsel for the assessee reiterated the submissions which were made before the Ld. AO and Ld. CIT(A), which are narrated above and are not repeated here for the sake brevity. 5. We have heard the rival contentions and perused the material available on record. We take note of the findings given by the Ld. CIT(A) in para 4.3 and 5 which are extracted below: "4.3. I have perused the Submissions of the ld. AR and the Assessment Order. The AO has added the entire turnover of the commodities to the assessee's income. What could be added even in case of bogus or contrived transaction is net result of purchase and sale and ....
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....y the AO has to allow set off of past losses. He cannot do both. In view of the above, the AO may allow set off of brought forward losses/ depreciation." 5.1. From perusal of these findings, Ld. CIT(A) has come to a conclusion to sustain the addition of the net result of purchase and sale and not the entire sale and thus, deleted the addition made by the Ld. AO. However, while dealing with ground no. 10 in para 5, Ld. CIT(A) has held the commodity profit to be bogus. We note that while holding so, Ld. CIT(A) has not given his explanations, reasoning and the basis for arriving at such a conclusion. From these findings given in two paragraphs by the Ld. CIT(A) it is not discernible as to how and on what basis, Ld. CIT(A) has arrived at thi....