TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1417
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....ant treating the loss of Rs. 9,18,72,450/- as wrong claim of purchases. 3. He has erred in law and facts in not considering the additional grounds mentioned below in its proper perspective and without conducting any inquiry and wrongly treating the same as afterthought in as much as they went to the root of the matter:- a) The receipts as confirming party as per sale documents of land as detailed in Para 3.3 of the assessment order at Rs. 10,00,92,908/- being accommodating transactions ought not to have been treated as income of the assessee. b) On the receipts as confirming party under consideration being accommodating entries only and having been passed on to the land owners only commission income thereon ought to have been treated as income of the assessee and not the entire receipts. 4. He has erred in law and facts in not properly appreciating and considering the affidavit furnished before him by treating the same as afterthought and self serving without any inquiry. 5. He has erred in law and facts in not properly appreciating and considering the decisions on similar facts submitted to him and treating the decisions as not applicab....
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.... a member of Multi Commodity Exchange of India and on this trade, the assessee had suffered a loss of Rs. 9,18,72,450/-, which was adjusted by the assessee against the income from sale of properties (referred to above). However, on further verification, the Assessing Officer observed that the assessee had not furnished any supporting evidences with regards to membership obtained by assessee from M/s. Adventures India to transact business on behalf of the assessee on Multi Commodity Exchange. Accordingly, the Assessing Officer was of the view that firstly, the assessee had derived losses in transactions without taking delivery on derivatives, which cannot be considered for the purpose of set off, in view of the provisions of Section 73, Explanation 4 and secondly, the Assessing Officer observed that the PAN stated by the assessee as belonging to M/s. Adventures India, in fact, belonged to one Shri Ramesh Dwarkadas Daga and therefore, clearly losses incurred by the assessee on Multi Commodity Exchange were only an adjustment entry undertaken by the assessee to escape payment of taxes on income earned by the assessee on sale of properties. Accordingly, the said set off of loss was dis....
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....ransaction, but with the intended effect of it for fiscal purposes. No one can now get away with a tax avoidance project with the mere statement that there is nothing illegal about it". It is difficult to accept the submission of the appellant in view of the developments as regarding to the facts of the case. The facts and circumstances in the case of Genus Commu Trade Ltd for AY.2010-11 are entirely different from this case. In the case of Nexus Software Ltd. for A.Y. 2010-11, the CIT(A) has only reduced the quantum of commission added by the A.O. in assessment order. Even assuming that some of the facts are common in this case, with due respect the above orders, I have different understanding of the facts related to the case. It is very clear that the ratio of the above cases cannot be applied. The affidavit is an afterthought of the appellant and is self serving. From the above facts and circumstances, it is very clear that the appellant company has booked loss of Rs. (-)9,18,72,450/- in the transactions entered into by the assessee in taking bogus entry and claimed such loss against the gain of Rs. 10,00,92,908/- earned during the year on sale of land. In the circumsta....
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....t off losses incurred on Multi Commodity Exchange. However, further inquiries revealed that such losses incurred by the assessee on multi commodity exchange were clearly bogus losses, which were secured only with a view to reduce the incidence of such taxation from sale of properties. Even before us, the Counsel for the assessee admitted that such bogus losses are not eligible for set off and the fact that they are not genuine is not being challenged by the assessee. Thereafter, the assessee has taken an alternate position that on perusal of the bank statement of the assessee, it is seen that the amounts received as sale consideration was immediately withdrawn by the assessee and thereafter, these amounts were transferred to various entities in which the sellers / owners of these properties had substantial interest. Accordingly, it was submitted that since the amount was deposited and withdrawn from the assessee's bank account at a very short interval, it is evident that the assessee was only earning commission income. However, on perusal of sale deed furnished by the assessee, it was observed that in the sale deeds in respect of these eight properties, it has been mentioned that t....
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....eir own set of facts. We observe that in the instant facts, there is no legal document produced by the assessee creating a right as "confirming party" to the assessee. Evidently there is no basis of payment given to the assessee for acting as "conforming party". Another interesting fact which was noted by us was that it is not clear from the entire arrangement of things whether the sellers have paid any tax on such sale of property. The Counsel for the assessee submitted that he has no visibility as to whether the sellers of these parties (for whom the assessee acted as a confirming party) have offered income from sale of property under the head "capital gains". Therefore, while initially, the assessee had shown income from such sale of property as it's taxable income (though the same was set against bogus accommodation losses incurred on commodity exchange) thereafter, the assessee changed it's position and argued / submitted that the assessee had only earned commission on such sale of properties by acting as "confirming party". Therefore, apparently neither the assessee has paid taxes on such sale of eight properties and evidently neither the sellers have paid taxes on such sale ....