TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 62
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....erved that assessee has debited loss of Rs. 7,04,43,296/- from transactions in currency derivatives. The AO issued noticed dated 13.10.2014, under Section 142(1) to the assessee, which remained uncomplied with. The AO again issued notice dated 16.01.2015 and the assessee filed reply on 02.02.2015 by Tapal (Post). In the said submission, no contract notes in support of loss were submitted by the assessee. The AO observed that all the transactions of currency derivatives was carried out by the assessee on MCX Exchange between period 27.02.2012 to 22.03.2012 and thus resulting into a loss of Rs. 7,06,43,296/-. The AO observed that the assessee used the services of a broker namely M/s. Marigold Vanijya Pvt. Ltd., which is based out of Calcutta and does not have any officer or branch in Ahmedabad. In order to verify the genuineness of the above transaction, since the assessee had incurred a substantial loss of Rs. 7.06 crores only within a gap of one month, the AO issued notice under Section 133(6) to MCX Exchange vide letter dated 12.12.2014. Thereafter, the AO issued notice under Section 142(1) of the Act to the assessee dated 19.02.2015 calling for details regarding the aforesaid los....
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....not Rs. 7,06,43,296/- as given by the assessee. Similarly, the AO observed that there was mismatch in the number of trades also. In view of the above analysis, the AO held that the maximum loss which can be allowed to the assessee is only Rs. 9,73,576/- and therefore, the balance loss is a bogus loss, being only an accommodation entry. The AO issued a show-cause notice dated 16.03.2015 and copy of statement of Shri Kakalbhai Modh and Shri Sachet Saraf, directors of the broker company alongwith data provided by exchange was also provided by the assessee alongwith the show-cause notice. In response to the same, the assessee filed reply dated 20.03.2013 alongwith copy of contract notes in Tapal (by Post). In the said submission, the assessee submitted that the mismatch in the data in the exchange and the trade recorded by the assessee was due to some mistake on the part of the exchange. Further, the assessee also requested for an opportunity to cross-examine the brokers. After taking the submissions of the assessee on record the AO made an addition of Rs. 6,96,69,731/- on the ground that the same is only a bogus loss and only an accommodation entry. Further, the request of the assesse....
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....nd during the course of search proceedings, statement of Shri Sachet Saraf, Director of MVPL and other statements do not contain anything incriminating as regards the assessee. The assessee was not allowed an opportunity to cross-examine the Directors of MVPL and on this count as well the assessment order is erroneous and bad in law. There is no mismatch between the transaction confirmed by MCX-SX and MVPL as alleged by the Ld. AO, the assessee has furnished detailed documentary evidences to prove the genuineness of the transaction and the Ld. AO has not been able to point out any discrepancy therein. Accordingly, in the instant facts the Ld. CIT(A) has not erred any facts and in law in giving relief to the assessee with respect to this addition. 6. We have heard the rival contentions and perused material on record. On going through the order passed by Ld. CIT(A), we are of the considered view that Ld. CIT(A) has not made any observations with respect to certain critical observations / issues raised by Ld. AO during the course of assessment proceedings. The Ld. CIT(A) has afforded relief to the assessee primarily on the ground that the transaction carried out by the assessee are d....
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....ses of the broker i.e. MVPL and it contained the name of the assessee company which was also made part of the appraisal report finalized in this regard. The AO observed that the above points out to the fact that assessee has procured accommodation entry of loss from MVPL and therefore, the loss incurred is a bogus loss. However, the Ld. CIT(A) has completely ignored this fact and has held in the appellate order that nothing incriminating as regards the assessee's transaction with MVPL was found during the course of search proceedings at the premises. Further, we observe that Ld. CIT(A) given relief to the assessee on the basis of documentary evidences furnished by the assessee evidencing the fact that it had given details regarding the transactions carried out at MCX Exchange. Even in the case of PCIT vs. Swati Bajaj 139 taxmann.com 352(Cal) it was observed that the assessee had filed copy of contract notes in support of purchase and sale of shares, alongwith company details as well as evidences with respect to such claim of exempt income. However, the Calcutta High Court held that evidences put forth by the Revenue regarding entry operation fairly leads to the conclusion that asse....