TaxTMI 
TaxTMI 
2023 (9) TMI 1108
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....aterials available on record. The assessee is a registered Non- Banking Finance Company ('NBFC') and is engaged in the business of purchase and sale of shares, securities, commodities and mutual funds, trading in derivatives, future & option and also derivative of commodities in commodity exchanges. The return of income for AY 2010-11 was filed by the assessee company on 13/10/2010 declaring loss of Rs. 18,43,753/-. The Original assessment was completed u/s 143(3) of the Act determining the total income of the assessee at Rs. 26,26,406/-. Before completing the assessment, the Ld. AO had issued a questionnaire together with notice u/s 142(1) of the Act dated 08/01/2013 calling for details of income from operations during the year under consideration and also directing the assessee to explain the speculation loss as shown thereon together supporting details. In this regard, the assessee, vide reply dated 21/01/2013 submitted the details of commodity trading loss (Net) of Rs. 42,47,083/- as under: Name of Broker Profit/Loss in Commodity Global Commodities Pvt. Ltd. -17,66,290.51 Smart Commodity Broker Pvt. Ltd. 93,39,115.01 R.K. Commodities Services Pvt. Ltd. 1,78,32,070.79 ....
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....mited for A.Y. 2010-11- regarding. With reference to the notice u/s 148 of the I.T. Act, dated 31.03.2017 issued to you for A.Y. 2010-11, please refer to your letter dated 20.04.2017 filed in this office on 21.04.2017. In this letter you have stated that income tax return filed vide Ack.No. 170172121121010 on 30.10.2010 be treated as filed in response to the notice u/s 148 of the I.T. Act. You have further requested to provide reasons recorded for initiation of assessment proceedings u/s 147 of the I.T. Act. The reasons recorded are as under: "The assessee filed its return of income on 13.10.2010 for the assessment year 2010-11 declaring Nil Income (rather loss of Rs. 18,43,753/-). The assessment u/s 143(3) was completed by DCIT, Circle-6, Kolkata vide order dated 26.02.2013 at an income of Rs. 26,26,406/- after adjusting brought forwarded losses of Rs. 30,98,495/- 1. Based on the Forwards Market Commission (FMC) report that "clients/members of NMCE were found to be involved in creating artificial volume and suspected evasion of Income Tax by misuse of NMCE platform" a focused survey action u/s 133A of the IT Act was conducted by Pr. Director of Income Tax (Investigation),....
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.... GULSHAN INVESTMENT COMPANY LIMITED AACCG0597R 26466650 27317451) 850800 PROFIT 2009*2010 Anjam Textile GULSHAN INVESTMENT COMPANY LIMITED AACCG0S97R 186473550 193929850 7456300 PROFIT 2009-2010 Foirdeal Finance Pvt. Ltd. GULSHAN INVESTMENT COMPANY LIMITED AACCG0597R 157107750 163398650 6290900 PROFIT 2009-20)0 Hemant Saraosii GULSHA N INVESTMENT COMPANY LIMITED AACCG0597R 72836300 75743500 2907200 PROFIT 2009-2010 Mahtbir Synthetic. GULSHAN INVESTMENT COMPANY LIMITED AACCG0S97R : 6173050 6610250 237200 PROFIT 2009-20IC Proficient 4. The Office of Pr. DIT(lnv.) Kolkata on the basis of its investigation has concluded that M/s Advent Commodities Pvt. Ltd, Anjani Textile Proprietorship concern of Shri Swapan Kumar Roy [AOBPR4855D], M/s Fairdeal Vincom Pvt. Ltd, Shri Hemant Sarawagi [AMVPS8048K], M/s Mahavir Synthetics Proprietorship concern of Shri Vijay Kumar [BBAPK6168F]], M/s. Proficient Commodities Pvt. Ltd. [AADCP 7843A], Name of R.K. Commodities do not appear in the information provided by the Inv. Wing neither were they held to be a party accommodating entries for us. are involved in providing a....
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....ieve that profit / income to the tune of the Rs. 1,79,21,950/- taken from the parties mentioned above has escaped assessment within the meaning of provisions contained in section 147 of the Act as the-assessee company has not declared its affairs correctly in the return filed by it. 9. In view of the material placed on record in the form of information received from D1T (Investigation), Kolkata and facts mentioned above, 1 have reason to believe that assessee has taken accommodation entries resulting into profit of Rs. 1,79,21.950/- which has escaped assessment. Accordingly, in order to bring to tax the income amounting to Rs. 1,79,21,950/- assessment for the A.Y. 2010-11 is proposed to be reopened u/s 147 of the I.T. Act. 10. The case pertains to a period beyond four years from the end of relevant assessment years at the time of issue of notice, necessary sanction is solicited from Pr. Commissioner of Income Tax-4, New Delhi, in view of the amended provisions of section 151 w.e.f. 01.06.2015. (Anil Gandhi) Deputy Commissioner of Income-tax Circle-10(2), New Delhi" 5. Notice u/s 148 of the Act was issued on 31.03.2017 to the assessee. The copy of the reasons were also....
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.... Deputy Commissioner of Income Tax, Circle-10(2), C.R. Building, New Delhi Ref: Information U/s 133 (6) of the I.T, Act. 1961 for the Assessment Year 2010-2011 Sub: Submission "Dear Sir, With regard to the information u/s 133(6) of the Act, as desired by your good self, we are submitting herewith the following documents and submission for your kind perusal, reference and consideration:- 1. The Detailed note in respect of all sources of Income for the Asst. Year 2010 -2011 is enclosed herewith. 2. The Copy of audited Balance Sheet including P&L account, all schedules along with audit report and copy of 3CD for the A. Y. 2010- 2011 are enclosed. 3. Yes, we have made transactions in National Multi Commodity Exchange during the F. Y. 2009-2010. 4. The Profit of Rs. 17832070.79 arose from those transactions. 5. The copy of account of the broker to whom transaction were made on the National Multi Commodity Exchange is Enclosed. 6. Apart from the National Multi Commodity Exchange we have also traded in other commodity Exchange i.e. Multi Commodity Exchange (MCX) and National commodity Exchange of India (NCDEX), This being the business of the company we also ....
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....nary verification of the facts from the Income Tax Return of the assessee would have enabled the Ld. AO to accept the contentions of the assessee that income is already offered to tax. In the instant case, this preliminary verification also was not even carried out by the Ld. AO. Even though as stated earlier, the information received from the Investigation Wing would constitute fresh material in the hands of the Ld.AO, the same would only became 'reason to suspect' not 'reason to believe' that income of the assessee has escaped assessment. The Ld. AO is duty bound to examine the return of the assessee, details filed during original assessment proceedings and its supporting documents of the assessee which are part of the assessment folder to examine as to whether this figure was disclosed in the return thereon. We find that the Ld.AO in the instant case was carried away by the information received from the Investigation Wing and considered the same as sacrosanct. Hence in our considered opinion, the Ld. AO did not have any information which had a live link to form a belief that income of the assessee escaped assessment warranting reopening within the meaning of section 147 of the A....
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....s that are relevant for the purposes of framing the assessment. How can the assessee be expected to prove the negative? The assessee could be expected to give explanation for the transactions carried out by it. It could not be expected to give explanation for the transactions not carried out by it, merely because some information had already been received by the Ld. AO from the Investigation Wing, Kolkata. 11. We also find that the Ld. AO in the original scrutiny assessment proceedings had examined the entire transactions of commodity/derivatives trading during the course of original assessment proceedings itself which is evident from notice u/s 142(1) dated 08/01/2013 enclosed in page 5 of the PB vide question No. 10 which read as under: "(10) Please explain how you would show this speculation loss of Rs. 18.43 lacs in your accounts with all supporting documents." 11.1 The assessee had furnished a reply before the Ld. AO vide letter dated 08.01.2013 by furnishing the complete details of income from operations together with script wise details of shares & securities, trader details along with ledger copies of derivatives and speculation profit. The assessee has also submitted ....