TaxTMI 
TaxTMI 
2023 (6) TMI 1267
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....egard? 2) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs. 5,60,54,528/- made on account of unexplained increase in capital holding that the capital accumulation is fully explained on the basis of capital in the ITR of A.Y 2011-12 and accumulated income in the ROI for A.Y 2012-13 to A.Y 2014-15 ignoring that assessee has shown NIL capital balance in ITR filed for A.Y 2014-15? 3) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs. 80,70,224/- made on account of investments in F&O and equities from unexplained sources holding that the same was found explained from the withdrawal from Firms and bank transfers along with profits from F&O STCG, LTCG and other profits, ignoring that during the assessment proceedings assessee could not explain the source of Rs. 80,70,244/- over and above ethe withdrawals from firms and bank transfers? 4) It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent." 3. Now we shall take grounds of Rev....
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....l Securities Ltd., M/s J M. Financial Services Ltd., M/s Jainam Share Consultants and M/s Nirmal Bang and you have shown total profit of Rs. 77,57,945/- from Futures and Options trading. On perusal of the statements showing transaction undertaken by you during F.Y 2014-15 in the trading of Future & Options. It is seen that there is huge difference in the profit shown by you in ROI. The details of total investments, sales and profit thereon earned by you in different derivatives from above four parties are as under: Sr. No. Name of the parties Total investment (amount in Rs) Total sales receipt (amount in Rs) Net profit (Amount in Rs. ) 1 Jainam Share Consultant Pvt. Ltd. 35,31,533/- 35,48,991/- (-) 38,86,586/- 2 Nirmal Bang Securities Pvt. Ltd. 5,91,101/- 7,59,859/- (-)1,68,758/- 3 J.M. Financial Services Pvt. Ltd. 2,62,74,330/- 2,07,77,317/- 54,97,013/- 4 Motial Oswal Securities Ltd. 5,7216,719/- 1,11,85,781/- 4,60,30,938/- 5.2 From the above details, it is very clear that you have earned total profit/gain from trading of future and options of Rs. 4,74,72,607/-, whereas you have shown only profit o....
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....tention of assessee and observed that the assessee has stated that the figure mentioned in his ledger with regard to individual share brokers and that ascertained in the SCN are different and imaginary. The said contention of the assessee is totally baseless and uncalled for. Therefore, assessing officer had called for information u/s 133(6) of the Act from the relevant share brokers and had obtained the gain loss statement in the case of the assessee. The gain / loss statement so ascertained was differentiated separately in an excel sheet and on the basis of the said statement the profit derived by the assessee had been ascertained. The said excel sheet reflecting the difference pertaining to Motilal Oswal is given hereunder: Sr.No. (+) (-) Sr.No. (+) (-) Sr.No. (+) (-) 1 (+) (-) 31 6641.5 3040 61 45127.5 34170 2 4625 66330 32 18428.75 325365 62 5216.25 19520 3 1250 66330 33 76640 527386.3 63 79787.5 23110 4 4720 82080 34 36120 201130 64 1906903 1350 5 47960 239690 35 8100 1495 65 92750 13240 6 35520 49940 36 ....
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.... 126 2090 29863 156 13960 - 186 1920 97 17400 26710 127 4566662 2812 157 1040 - 187 521260 98 7470 42610 128 17540 344095 158 84250 - 188 3920 99 19730 6345 129 192843 - 159 26265 - 189 141000 100 3470 131140 130 7555923 - 160 335 - 190 2691 101 44870 20520 131 24500 - 161 16700 - 191 17645 102 5860 257285 132 17027 - 162 33080 - 192 172770 103 154130 30838 133 76072 - 163 20720 - 193 38310 104 20760 12212 134 88617 - 164 206040 - 194 45600 105 16560 10753 135 13462 - 165 45240 - 195 500040 106 39360 41360 136 54957 - 166 5240 - 196 3510 107 8960 10212 137 4620 - 167 31640 - 197 14660 108 228880 3735 138 38855 - 168 84240 - 198 110100 109 ....
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.... 541523 62 479563 36019 3 239229 31418 33 3613 122755 63 1039864 172871 4 148448 2232 34 60259 278910 64 276135 89499 5 476356 131230 35 685484 1291 65 46180 12446 6 297914 166684 36 79546 28130 66 47846 19318 7 4588069 145380 37 196873 74914 67 52118 97582 8 4025 80933 38 9579 125051 68 18996 251605 9 694072 963878 39 200942 215388 69 257528 104657 10 203306 26115 40 325127 6327 70 396533 8991 11 1886308 301077 41 6271 288921 71 301488 26592 12 661055 79107 42 14440 16905 72 95850 357421 13 56378 31364 43 14861 219976 73 58623 1444858 14 110275 45253 44 112543 111524 74 8506 704775 15 11294 35525 45 79361 1537341 75 63555 307003 16 2866 90847 46 728458 170202 76 86182 11356 17 14619 383199 47 1018276 66026 77 14813 88714 18 746 71057 48 183510 5845 78 ....
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.... 120 28143 - 11. Thus, as per the above, the net gains derived by the assessee was Rs. 2,62,74,217/- and net loss at Rs. 2,06,63,317/- resulting into net gain of Rs. 56,10,900/- 12. The excel sheet reflecting the difference pertaining to Jainam Share Consultants Pvt. Ltd. is given hereunder: Sr.No. (+) (-) Sr.No. (+) (-) Sr.No. (+) (-) 1 3545 1061232 31 43726 16398 61 37420 99960 2 63343 851781 32 43720 103808 62 55545 26860 3 8049 20494 33 19828 10595 63 - 15470 4 41776 1816894 34 10305 9755 64 - 217780 5 15640 43856 35 18640 89560 65 - 36780 6 36393 7449 36 95160 2340 66 - 22960 7 43601 126686 37 29960 6378 67 - 10689 8 37476 33035 38 41760 13328 68 - 29226 9 36501 64785 39 7560 6718 69 - 10387 10 28201 71509 40 64880 6320 70 - 13417 11 99948 83497 41 640 67220 71 - 36123 12 121000 13057 ....
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....officer. 16. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Learned CIT(A) who has partly deleted the addition made by the Assessing Officer. The ld CIT(A) observed that the Assessing Officer's working of net gain from the brokers gain/loss statement is misleading figure and not the actual profits. The assessing officer was given opportunity to consider the reconciliation tables and submit remand on the same. However, in the remand report dated 29.12.2018, the assessing officer has ignored the issue of reconciled statement and did not offer any comments. The main reason for discrepancies was analyzed by the ld CIT(A), and after proper analysis the addition of Rs. 3,97,77,965/- was deleted and only addition of Rs. 60,088/- pertaining to incorrect loss computation by the assessee was hereby confirmed by ld CIT(A). Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us. 17. Learned CIT-DR for the Revenue, argued that during the assessment stage, on verification of the details submitted by the assessee with respect to trading in future and option business, it was observed by the assessing officer tha....
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....the applicable legal position. In order to prove the genuineness of the transaction, the ld Counsel, submitted following documents and evidences, viz: (i) Computation of income (Pb pages 1-5) (ii) Balance sheet and P&L account(Pb pages 6-7); (ii) assessee's reply dated 12.10.2017 to Assessing Officer(Pb pages 8-9); (iv) assessee's reply dated 11.09.2017 to Assessing Officer with annexures pages 11 to 27; (v) contra ledger account of assessee from 4 parties( Pb pages 28 to 81) (vi) ledger account in assessee's books of 4 parties (Pb from pages 82 to 103); (vii) Assessee's reply to assessing officer dated 13.11.2017 (Pb pages 104 to 105) (viii) ledger of IDBI savings (Pb pages 106-111); (ix) Capital account in magic fashions (Pb pages 112 to 113), (x) Capital account in N.M. Fashions (Pb page No.114); (xi) Return of income of assessee AY. 2014-15 (Pb pages 115 to 141), (xii) Assessee's reply dated 22.11.2017 before A.O(Pb pages 168 to 196), (xiii) Profit and Loss statement of Jairam Share Consultants (Pb pages 170 to 172), (xiv) Documents relating to Nirmal Bang Securities (Pb pages 173 to 174), and documents relating to J.M. Financial (Pb pages 175 to 191), (xv) Documents and eviden....
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....st Rs. 77,57,945/- shown by the assessee in the return of income. We note that Assessing Officer considered the reply of the assessee during assessment proceedings, however held in para 5.4 (page 6 of assessment order) that above net income was worked out from the gain/loss statement called from brokers u/s 133(6) of the Act. The Assessing Officer reproduced excel sheet working of net gain/loss in the assessment order and did not accept the assessee's objection to the figures ascertained. Thus, addition of Rs. 3,97,77,965 (Rs. 4,75,35,910 -Rs. 77,57,945) was made to the total income of the assessee. 21. In the appellate proceedings, the assessee explained the reason for working of net income of Rs. 3,97,77,965/- by the Assessing Officer. The assessee has shown from the details of the same gain/loss statement analyzed by the Assessing Officer that in the case of Jainam Share Consultants Pvt. Ltd., the Assessing Officer considered all transactions including commodity trading and shares trading to arrive at net loss of Rs. 38,86,586/-as against assessee's working of profit at Rs. 55,129/-. The assessee stated and shown from Profit & Loss account that profits in the form STCG was sh....
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....#39;s working of net gain from the brokers gain/loss statement is misleading figure and not the actual profits. The Assessing Officer was given opportunity to consider the reconciliation tables and submit remand on the same. However, in the remand report dated. 29.12.2018, the Assessing Officer has ignored the issue of reconciled statement and did not offer any comments. The main reason for discrepancies was analysed by the ld CIT(A) and it was noted by ld CIT(A) that in the working profits from Motilal Oswal Sec. Ltd., all the transactional value of F & O rolled over was misread as profits by the Assessing Officer. Once this column of rolled over F & O transaction are considered properly, the assessee's profit working was found to be correct. Similarly, in the case of Jainam Share, the share trading and commodity trading transactions were added with F & O transactions leading to incorrect loss figure. In view of these facts and circumstances, the ld CIT(A) held that the difference in profits worked out by the Assessing Officer from Future & Option transactions are incorrect and not sustainable. Thus, the addition of Rs. 3,97,77,965/- was deleted and only addition of Rs. 60,088/- p....
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....turn of income (ROI) for A.Y. 2012-13 to A.Y. 2014-15 ignoring that assessee has shown NIL capital balance in ITR filed for A.Y. 2014-15. The DR further stated that assessee himself has contended that in the return for the A.Y. 2014-15, assessee had not filed the figures of balance sheet, hence the return of income for the said year reflected Nil capital. In case the assessee was having capital balance during the said year, it was mandatory for the assessee to reflect the actual figures in his return of income. Failure to furnish the same is a mistake on his own part, hence by contending now without any evidence that assessee had capital balance during the previous year would not suffice. Therefore, ld DR contended that addition made by the Assessing Officer should be sustained. 28. On the other hand, Shri Mehul K.Patel, ld Counsel for the assessee, pleaded that the capital balance of Rs. 5,60,88,803/- includes opening capital of Rs. 4,11,58,447/- as well profits of current assessment year from partnership firms, Future & Option profits, interest income, STCG/LTCG, dividend etc. The ld Counsel has also furnished summary of capital balance starting from AY 2011-12 taking capital ....
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....eye of law and deleted the addition. We have gone through the above findings of ld CIT(A) and noted that conclusions arrived at by the CIT(A) are correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss ground No.2 raised by the Revenue. 30. Coming to the ground No.3 raised by the Revenue, which relates to deleting the addition of Rs. 80,70,224/- made on account of investments in Future &Option and equities. 31. Learned DR for the Revenue submitted that investments in Future &Option were made by the assessee from unexplained sources. Therefore, ld CIT(A) erred in deleting the addition holding that the same was found explained from the withdrawal from Firms and bank transfers along with profits from F&O, STCG, LTCG and other profits, ignoring the fact that during the assessment proceedings, assessee could not explain the source of Rs. 80,70,244/- over and above the withdrawals from firms and bank transfers, therefore, ld DR contended that addition made by the assessing officer may be sustained. 32. On the other hand, ld Counsel argued that assessee has filed a reconciliation chart explaining the source of funds for investment of R....