TaxTMI 
TaxTMI 
2026 (3) TMI 1004
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the information received from SFIO and other information as available with him and concluded that the assessee had entered into fictitious commodity transactions by way of CCM. The AO had worked out total fictitious buy of Rs. 11,34,20,350/- and total fictitious sale of Rs. 10,88,87,175/- which were added to the income. In addition, the profit of Rs. 1,00,79,414/- derived in these transactions was treated as STCG and also added to income. The assessment was completed u/s 147 r.w.s. 144B of the Act on 31.03.2022 at total income of Rs. 24,47,53,619/-. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the learned CIT(A) vide the impugned order and the appeal of the assessee was allowed. 4. Now the Revenue is in appeal before us. The original grounds taken by the Revenue were modified in the course of hearing. The modified grounds of appeal filed by the Revenue are as under: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 10,88,87,175/- under section 69A of the Act, without appreciating the fact that the AO'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rent clients. The Ld. CIT-DR submitted that SEBI too had acknowledged the involvement of ARCL in the entire NSEL scam. According to the Ld. CIT-DR, the assessee was involved in the larger racket of the NSEL scam and was a beneficiary of fictitious loss/gain on account of speculative transactions. Accordingly, the AO had worked out fictitious buy and fictitious sale transactions carried out by indulging in CCM and accordingly such fictitious buy and sale amounts were added to income of the assessee. Further, the profit derived by the assessee in such transactions was also separately added. Accordingly, the Ld. CIT-DR strongly supported in the order of the assessing officer. 6. Per contra, Shri Mitesh Mehta, Ld. CA of the assessee submitted that the assessee had disclosed total turn-over of Rs. 67,14,19,781/- and the transactions of fictitious buy and fictitious sale as worked out by the AO on account of CCM, was part of trading account of the assessee. Therefore, no separate addition in this regard was called for as these transactions were duly reflected in the trading account of the assessee. He submitted that the profit derived by the assessee on account of CCM transactions was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sales as disclosed by the assessee in its trading account. Further, the profit earned by the assessee by way of manipulated trading through CCM transactions was also included in the profit as disclosed by the assessee in its P&L account. The finding given by the Ld. CIT(A) in this regard is found to be as under: 8. The Revenue has been unable to controvert the findings of the Ld. CIT(A). The fact that the transactions of sales and purchases related to CCM arising from trading on NSEL platform was accounted for in the trading account of the assessee has not been disputed. Under the circumstances, no separate addition for sales and purchases related to CCM transactions could have been made. Therefore, the additions on account of fictitious purchase of Rs. 11,34,20,350/- and fictitious sale of Rs. 10,88,87,175/- was rightly deleted by the Ld. CIT(A). Similarly, the profit derived by the assessee in CCM transactions was also duly reflected in the gross profit as disclosed in the trading account. Therefore, there was no justification for making separate addition of Rs. 1,00,79,414/- on account of STCG derived on CCM transactions. The decision of the Ld. CIT(A) on this issue is also u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade from the audited books of accounts and broker's statement and transactions of sale and purchase are backed by the supporting documents viz. Contract notes of Commodity Trading (Date wise), Ledger confirmation of Broker, Bank statement highlighting payment and receipts to M/s Anand Rathi Commodities Ltd, etc. The transactions of purchase and sale stated to be part of client code modification vis-Ã -vis transaction Document 2 AY 2013-14 DYNAMATIC DEVELOPERS PRIVATE LIMITED of purchase and sale reported in regular books of accounts are summarised as under :- 1957.300 Ln.maa LILZE ------ CÆ°Æ¡ng Put As evident from the above tabular data, all the purchase transactions of CCM are Rs.12,56,60,350/- as against reported transaction of Rs.11,34,20,350/- which are included in the total purchase transaction of Rs.66,13,40,367/- reported by the appellant in its books of accounts. Similarly, all the sale transactions of CCM are Rs.10,85,31,175/- as against reported transaction of Rs.10,88,87,175/- which are included in the total sale transaction of Rs.55,19,21,696/- reported by the appellant in its books of accounts. Further, profit earned on NS....