RADHIKA AGARWAL,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4(1), HYDERABAD

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ITA 531/HYD/2018Status: DisposedITAT Hyderabad23 November 2021AY 2014-155 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to provide sufficient details, contract notes, or confirmations from authorized agents to substantiate the MCX trading loss. Therefore, the disallowance of the loss claim by the lower authorities was upheld.

What were the facts?

The assessee claimed an MCX trading loss of Rs. 1,10,65,000/-. The Assessing Officer disallowed the loss due to lack of details and unverifiability. The CIT(A) upheld the disallowance, noting the absence of contract notes and confirmations from alleged agents.

What were the issues?

Whether the MCX trading loss claimed by the assessee was allowable when sufficient supporting documentation and verification were not provided to the revenue authorities.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri A. Mohan Alankamony & Shri S.S. Godara

For Appellant: Shri Mohd. Afzal
For Respondent: Shri Sunil Goutam
Hearing: 22.11.2021Pronounced: 23.11.2021

O R D E R Per S.S. Godara, J.M. This assessee’s appeal for A.Y 2014-15 arises from the Commissioner of Income Tax (Appeals)-1, Hyderabad’s order dated 17.11.2017, in case No.0402/CIT(A)-1, Hyd/2016-17/2017-18 involving proceedings under section 143(3) of Income Tax Act, 1961 (in short, “the Act”).

Heard both the parties. Case file perused.

2.

Coming to the assessee’s sole substantive grievance that both the Assessing Officer as well as the learned CIT(A) have erred in law and on facts in disallowing her loss claim of Rs.1,10,65,000/-, we note that the latter’s lower appellate discussion to this effect reads as under :

1.

“5.1 During the assessment proceedings, the Assessing Officer noticed that the assessee has claimed 'MCX Trading Loss' of Rs.l,10,65,000/-. However, the details of computation of trading loss was not submitted by the assessee. The assessee submitted that the details were available in the ledger, but the same cannot be deducted from the ledger. The Assessing Officer concluded that in the absence complete details regarding MCX trading loss, the loss claimed by the assessee was not verifiable. In view of this, the Assessing Officer disallowed loss of Rs.1,10,65,000/- claimed towards MCX Trading Loss. 5.2 Before me, the appellant submitted that the assessee is a trader of gold bullion. The appellant submitted that during Aug, 2013, she had suffered commodity hedging losses in the MXC Commodity Exchange due to sudden deprivation of INR/USD from Rs.55 to 69. Hence, the appellant requests to allow the present appeal in the interest of justice. The appellant submitted the following Corporation Bank account statement of Smt. Radhika Agarwal from 24.05.2013 to 19.03.2014 also ledger account of In M/s. Indiabulls Commodities limited for the period from 08.07.2013 to 12.08.2013. M/s. Sharekhan Commodities Pvt Ltd merge ledger report from 01.04.2013 to 31.03.2014 M/s. Hariom Bullion Future Trading Co. Account ledger from 01.04.2013 to 31.03.2014 and Trade Lists 5.3 The submissions of the appellant have been carefully considered. The appellant has not submitted details of the information called by the Assessing officer. On that basis, the appellant's claim of losses to the tune of Rs.l,10,65,000/-. Before me, the appellant submitted that the appellant is in business of sale and purchase of bullion, jewellery and precious stones and has net loss of Rs.48,59,274/-. Appellant submitted her own

Dank account and M/s. P.H.Jewels, which is her proprietary concern. As seen from the bank account of M/s. P.HJewels huge amount of cash deposits has been made during the year totaling up to Rs.42,66,48,000/- by PAN: AEQPA6815H. As per balance sheet, she has receivables of Rs.2,28,31,865/-. As per Trading account-l, she has sales of Rs.70,15,95,331/- and profit of Rs.68,22,837/-. While her trading account-2, her sales are Rs.l,36,36,900/- and profit of Rs.45,900/ - No further clarification was submitted by the appellant before me as to which account deals which commodity. Appellant has claimed the following expenditure:

Credit Card Andhra Bank - Rs.50,000/- VAT - Rs.8,094/- Bank Charges – SBH - Rs.37,163/- Bank charges - SBI - Rs.69,374/- Other expenses - Rs.97,780/- Salaries and wages – Rs.4,20,000/- MCX Trading Loss - Rs.l,10,65,000/- Total - Rs.1,17,47,411/-

Details of M/s. MCX Trading Loss has not been provided in the annual accounts nor before me. Appellant submitted that M/s.MCX Agency is authorised agency for commodities of the appellant. No such contract copies from any of the agencies mentioned by the appellant was submitted before me. However, unaudited, unverifiable ledger account of M/s. Share khan Commodities Pvt Ltd, M/s.Hari Om-Bullion Future Trading and M/s.Indiabul1s Commodities Limited under the head M/s. P.H.Jewels. Appellant has not given any confirmation letters from the alleged authorised agents. As per the Form 3CD report done by N.L. Narayana & Co., Chartered Accountants, Hyderabad, no details have been submitted regarding the valuation of the stock. As the appellant did not give any submission of proof and details regarding MCX Trading Loss, allowability of the losses cannot be upheld. Addition made by the Assessing Officer is sustained.

3.

Learned counsel vehemently contended that the assessee’s impugned loss pertaining to “MCX” commodity exchange in gold bullion trading had been wholly and exclusively incurred for the purpose of business and therefore, both the lower authorities ought to have allowed the same.

4.

Mr. Mohd. Afzal failed to rebut the learned CIT(A)’s clinching findings that the assessee had neither filed all the relevant details of the exchange; not even contract notes, but also she could not get even the confirmations from the alleged authorized agents. We therefore find merit in Revenue’s vehement contention that the learned CIT(A) has rightly affirmed the Assessing Officer’s impugned action in rejecting the assessee’s loss claim. The assessee fails in her sole substantive grievance.

5.

No other ground has been pressed before us.

6.

This assessee’s appeal is dismissed.

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