SHRI NAGARMAL JAIN,GUWAHATI vs. INCOME TAX OFFICER, WARD-1(3, GUWAHATI

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH “E” COURT AT KOLKATA Before Shri S.S.Godara, Judicial Member and Dr. A.L.Saini, Accountant Member ITA No.369/Gau/2018 Assessment Year :2014-15

Nagarmal Jain V/s. Income Tax Officer, 3rd Flor, Suparshwa Ward-1(3), Aayakar Bhawan, Nr. Pawan Bhawan, Christian Supply Co. A.T. Road, Basti, G.S. Road, Guwahati-009 Guwahati-781005 [PAN No.AEPPJ 2336 B] .. अपीलाथ� /Appellant ��यथ�/Respondent

None अपीलाथ� क� ओर से/By Appellant Shri M.C Omi Ningshen, JCIT SR-DR ��यथ� क� ओर से/By Respondent 11-12-2019 सुनवाई क� तार�ख/Date of Hearing 18-12-2019 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER BEMCH:- This assessee’s appeal for assessment year 2014-15 arises against the Commissioner of Income Tax (Appeals)-1 Guwahati’s order dated 17.09.2018 passed in case No.Guwa[A1]-165/16-17/111 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Case called twice. None appears at the assessee’s behest. We are informed that the assessee has submitted an adjournment petition seeking postponement of hearing but nobody has come to pursue the same. We therefore reject the assessee’s adjournment petition. The case is now taken up for adjudication on merits. Heard learned departmental representative. Case file perused.

ITA No369/Gau/2018 Assessment Year: 2014-15 Nagarmal Jain Vs. ITO Wd-1(3), Guwa Page 2 2. It transpires during the course of hearing with the able assistance of learned departmental representative that both the lower authorities have treated the assessee’s claim of profits derived from commodity exchange transactions as unexplained cash credits. The CIT(A)’s detailed discussion to this effect reads as under:- “Decision Ground nos. 1 & 4 The above grounds of appeal being general in nature, require no adjudication. Ground nos. 2 & 3 The above grounds of appeal challenge an addition of Rs.6,89,956/- and are being adjudicated together. I have gone through the relevant observations of the Ld AO as contained in the order impugned, the submissions of the appellant as also the material placed before me during the course of appellate proceedings. The appellant had filed this appeal against an addition of Rs.6,89,956/- being the difference between the aggregate value of sales and the aggregate value of purchases executed by the appellant on the National / Multi Commodity Exchange o India. Per contra the Ld AO had made the addition since the appellant could not furnish any explanation in this regards and had also agreed to offer the income generated out of commodity exchange transactions during the year 2013-14.The relevant observations / findings of the Ld AO are contained in para 5 of the order impugned, which is a under:- ‘5. Moreover, as per Departmental CIB information available on record, assessee has undertaken “National / Multi Commodity Exchange Contract” during FY 2013-14 for sale or purchase through National Stock Exchange. The total transaction value being Rs.3,77,16,186/-. When confronted with this issue, the A/R of the assessee could not offer any satisfactory explanation, however, he agreed to offer the income generated out of commodity exchange ‘transaction during the year 2013-14. During the course of appellant proceedings, the appellant had contended that sufficient opportunity were not permitted to him by the Ld AO. The appellant had also contended that all the transactions were entered into through a same broker and under a same client code. The appellant had also contended that no payments / receipts in regard to transactions entered into on National / Multi Commodity Exchange of

ITA No369/Gau/2018 Assessment Year: 2014-15 Nagarmal Jain Vs. ITO Wd-1(3), Guwa Page 3 India were made or received by him and that the appellant was not confronted with any such details as alleged. It is pertinent to mention here that even though the appellant had alleged that no details of any such transactions were made available to him by the Ld it is incomprehensible then as to why in para 5 of the order impugned, the Ld AO had recorded a findings that when confronted with this issue, the A/R of the appellant could not offer any satisfactory explanation, however, he agreed to offer the income generated out of commodity exchange transaction during the year 2013-14. Thus, it is clear that before the Ld AO the appellant had agreed for addition, before the undersigned a plea has been taken that the details of the alleged transactions were not confronted. Be that as it may, the situation is such as is contended by the appellant, there is no affidavit in this regard, or any confirmation from the then A/R of the appellant, who represented the appellant before the Ld AO duly negating the observations of the Ld AO. In fact, from a perusal of the order it is incomprehensible as to why the appellant’s intra day transactions were treated as his income from other sources and as to whether looking into frequency, volume, routine, etc., the said activity could have been treated as a business or otherwise. The very conduct of the appellant in offering his income from intra day transactions as his income from other sources, only goes to suggest that the appellant was shoddy qua his transactions in shares and securities. In the absence of any further details, such as transactions wise explanation of such items, copies of broker’s financial ledger, confirmation from the broker that the transactions in National / Multi Commodity exchange of India, as denied by the appellant, did not pertain to the appellant, it is clear that the relief claimed cannot be permitted to the appellant. In fact, looking into the fact that the appellant had executed umpteen transactions, it s not digestible that the appellant was not reconciling his transactions as per the financial ledger of the broker or that the brokers financial ledger was not being received by him and in case any such infirmity did exist, as to why and whether the appellant had made any communication in this regard with the broker or with the corresponding National / Multi Commodity Exchange of India. In view of the above observations, I do not find any merit in the contention of the appellant. The above grounds of appeal are dismissed.” 3. The Revenue’s case in view of the above extracted detailed discussion in the CIT(A)’s order is that the assessee could not prove the relevant evidence in support of having derived the impugned profits from commodity transactions. We notice that neither the lower authorities have discussed or examined the assessee’s corresponding details of the commodity transactions

ITA No369/Gau/2018 Assessment Year: 2014-15 Nagarmal Jain Vs. ITO Wd-1(3), Guwa Page 4 nor have they issued any notice to the concerned broker as well as the stock exchange for necessary factual verification. We therefore deem it appropriate to restore the instant sole issue back to the Assessing Officer for afresh adjudication as per law within three effective opportunities of hearing.