TaxTMI 
TaxTMI 
2021 (11) TMI 1235
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....on remaining as on 15/03/2020, if any, shall become available with effect from 15/03/2021. Since these appeals were filed on 21/10/2020 hence, squarely covered by the aforesaid Supreme Court judgment. Thus, respectfully following the aforesaid judgment, we condone the delay and proceed with the appeals. 2. Since in all appeals almost grounds common and amount and assessment years are different therefore for the sake of brevity we would like to dispose of appeals by a common order. 3. First of all, we would like to take up IT(SS)A No. 55/Ahd/2020 wherein revenue has taken following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year ....
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....NMCE in the last quarter of each year and said fictitious losses are set off with the profits earned from trading from other platforms. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 11,89,915/- made on account of disallowance u/s. 14A of the Act. 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 10. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 4. Brief facts of the case are that the assessee is a Pvt. Ltd. Company, engaged in the business of shares & securities, commodities / F&O derivatives etc. During the year, the assessee has carried out transactions through various brokers from NSE/BSE/MCX/NMCL platform. The assessee carried out commodity trades mainly on MCX and NMCE platform. 5. There was a search on Affluence Group of Companies including the assessee, Affluence Commodities Pvt. Ltd. [ACPL] on 18-12-2014. Therefore, the notice under Section 153A was issued for A.Y. 2009-2010 to A.Y. 2015-2016. The assessee furnished the income tax ....
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....by purchasing at higher rate and selling at lower rate. Therefore, the commodity loss made by the assessee. 11. On the other ground assessee submitted that the learned AO. has stated that on examination of seized / impounded materials -however he has not stated which seized material and impounded material on which the reliance is placed. In fact, there is no incriminating material regarding commodity loss whatsoever found during the search. It should be noted that there may be search or survey on Ahmedabad Commodity Group and the data is collected from Ahmedabad Commodity Group i.e. National Multi Commodity Exchange [NMCE]. The FMC has submitted the report that NMCE was involved in providing accommodation entry either for profit or loss. This observation are now no more relevant in view of the Order of the NMCE based on the Forensic Audit Report. NMCE is recognized by FMC. In other words, it is a recognized Exchange. All commodity traders trade through NMCE regularly. The learned AO has presumed that the assessee has also taken the accommodation entry of loss and therefore has presumed that such loss is a fictitious loss. The conclusion drawn is without any basis or evidence and....
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....l of the assessment order, it is unambiguously clear that the additions especially in relation to disallowances of losses incurred by the assessee in commodities trading on NMCE platform, is based on the data available in the NMCE Exchange and probably in the computes of the brokers and the assessee. The commodities trading, having taken place online electronically through the Exchange, have to reside in the servers of the Exchange and in the computers of the brokers and these data cannot be held to be incriminating in the nature within the meaning expounded in the case laws by the Hon'ble Courts. This data related to commodity trading cannot became incriminating even if some of the brokers and parties have admitted to some modus operandi in the entire operation so as to accruing of losses by the beneficiary/assessee. Moreover it is also established that such statements have not be confronted to the assessee wherein it has not been given opportunity to cross examine such parties/brokers whose statements have been adverse to the beneficiary/assessee. 16. It is well settled legal principle that addition based on third party statement/evidence cannot with stand if proper opport....
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..... Vireet Investment P. Ltd. 82 taxmann.com 415 (Delhi SB) and CIT vs. Gujarat State Fertilizers and Chemicals Ltd. 358 ITR 323 (Guj.) as the additions on account of section 14A has already been directed to be deleted by the Ld. CIT(A) and we have also confirmed the action of the Ld. CIT(A). Therefore, disallowance u/s. 14A could not be added/adjusted for computation of book profit u/s. 115JB, and we hold that Ld. CIT(A) has passed reasoned and detailed order and same does not require any kind of interference at our end. 22. It is pertinent to mention here that Ld. CIT(A) sought para-wise remand report from the Ld. A.O. at the submission filed by the assessee. 23. In the result, appeal filed by the Revenue is dismissed. 24. Now we come to IT(SS)A No. 54/Ahd/2020, the Revenue has taken following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act. 2. On the facts and in th....
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.... the Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO as mentioned in the assessment order that the assessee was continuously booking losses from a single platform i.e NMCE in the last quarter of each year and said fictitious losses are set off with the profits earned from trading from other platforms. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 9. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 25. Since we have dismissed appeal of the Revenue in connected IT(SS)A No. 55/Ahd/2020 in rest of the remaining appeals almost grounds are common only amount and assessment years are different and for the sake of brevity, we do not want to repeat over here. 26. Now we come to IT(SS)A No. 56/Ahd/2020, the Revenue has taken following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during th....
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....ts of various persons receded during search proceedings for making additions. 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO as mentioned in the assessment order that the assessee was continuously booking losses from a single platform i.e NMCE in the last quarter of each year and said fictitious losses are set off with the profits earned from trading from other platforms. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 11,46,519/- made on account of disallowance u/s. 14A of the Act. 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 10. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 27. Since we have dismissed appeal of the Revenue in connected IT(SS)A No. 55/Ahd/2020 in rest of the remaining appeals almost grounds are common only amount and assessment years are different and for the sake of brevity, we do not want to repea....
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....le no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 30,53,12,559/- made on account of disallowance of fictitious commodity losses in respect of transactions made through NMCE platform. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that no incriminating documents were found relating to additions made overlooking the facts that the AO has taken into cognizance of seized material/statements of various persons receded during search proceedings for making additions. 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO as mentioned in the assessment order that the assessee was continuously booking losses from a single platform i.e NMCE in the last quarter of each year and said fictitious losses are set off with the profits earned from trading from oth....
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.... in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s.158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. 4.1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s. 132 is conducted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. 5. On the facts and circumstances of ....
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.... 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period U/S.158BB was to be made on the basis of evidence found as a result of search or requis....
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..... CIT(A) ought to have upheld the order of the A.O. 11. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 36. Since we have dismissed appeal of the Revenue in connected IT(SS)A No. 55/Ahd/2020 in rest of the remaining appeals almost grounds are common only amount and assessment years are different and for the sake of brevity, we do not want to repeat over here. 37. At the outset, we note that similar grounds were raised by the Revenue in the same assessee's case bearing IT(SS)A No. 55/Ahd/2020 corresponding to assessment year 2009-10 to 2014-15 which has been decided against the revenue. We hold that finding given in the said appeal with respect to IT(SS)A No. 55/Ahd/2020 will mutatis mutandis apply here in these cases also. 38. Now we come to IT(SS)A No. 60/Ahd/2020, the Revenue has taken following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even th....
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....edings for making additions. 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO as mentioned in the assessment order that the assessee was continuously booking losses from a single platform i.e NMCE in the last quarter of each year and said fictitious losses are set off with the profits earned from trading from other platforms. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,83,320/- made on account of unaccounted cash income from Off Market Trading (Dabba Trading). 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 18,22,436/- made on account of disallowance u/s. 14A of the Act. 10. On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 11. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 39. Since we have dismissed appeal of the Revenue in connected IT(SS)A No.....
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....ucted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.2,72,31,401/- made on account of disallowance of fictitious commodity losses in respect of transactions made through NMCE platform. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that no incriminating documents were found relating to additions made overlooking the facts that the AO has taken into cognizance of seized material/statements of various persons receded during search proceedings for making additions. 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO as mentioned in the assessment order that the assessee was continuo....
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....and returns of income of the depositors to prove the identity of the persons, genuineness of the transactions and creditworthiness of depositors. However, you have simply furnished copy of accounts of these depositors from your books. You have failed to furnish complete addresses, PANs, confirmation of accounts, corresponding bank statements and return of income/sources of income of the depositors to prove the identity of the persons, genuineness of the transactions and creditworthiness of depositors. Show cause as to why the loans /deposits should not be treated as unexplained u/s 68 of the Act. Also show cause as to why corresponding interest expenses should not be disallowed." 44. In response to the above, vide submission dated 02.12.2016 the assessee has furnished copy of accounts, confirmations, bank statements/return of income in respect of some of the depositors. In respect of following loans/deposits the assessee has furnished only copy of accounts as per his books of account: Name Amount Date Mode of receipt Minesh M Juriwala 18500 04.04.2009 Cash Chandresh Shah 18000 11.05.2009 Cash Sandip Hemanbhai Shah 15000 08.07.2009 ....