ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMSHEDPUR, JAMSHEDPUR vs. HI-TECH CHEMICALS LIMITED, KOLKATA

Shri Akshay Ringasia, ld AR appeared for the assessee and Shri Sandipan Khan Ld. Sr DR appeared for the revenue.

It was submitted by the ld. Sr. DR that the assessee had admittedly shown Rs.2 crores as its earnings from transactions in derivatives. It was submission that in view of the project Falcon conducted by the Income tax Department, it was found that there were many cases where the assessee’s were showing income from derivatives which were bogus transactions and such incomes were being set off against the losses. It was the submission that in the assessee’s case, it was found that the assesse has booked the profit of Rs.2 crores in its return and the assessee has also offered the said income as its business income in its return and the assessee has also offered the said income as its business income in its return. It was submission that the total income disclosed by the assessee for the impugned Assessment Year of Rs.3,73,71,339/-. It was submission the AO treated the said transaction, more specifically, the profits earned from the said derivative transaction of Rs. 2 Crores as the undisclosed income of the assessee and brought the same to the tax. The AO also added the commission of 2% at Rs.4 lakh as unexplained expenditure of the assessee. It was the submission that the Ld CIT(A) had deleted the addition by holding that the profit had been credited to the Profit & Loss Account of the assessee and the assessee has not set off the same against any losses, but in fact, has disclosed the entire profits as the business income of the assessee. It was the submission that consequently the Ld. CIT(A) has also deleted the unexplained expenditure in the form of commission. It was the prayer that the order of Ld. CIT(A) is liable to be reversed.

In reply, the Ld. AR drew our attention to the assessment order wherein the AO recognises that the assessee has offered the said amount of Rs.2 crores as its income during the impugned assessment year. It was the further submission that the AO has taken the total income as disclosed by the assessee at Rs. 3,73, 21,339/- and has made the addition of Rs.2 crores again. It was submission that this amount to double taxation of same amount of Rs. 2 crores, insofar as Rs.2 crores has originally been offered by the assessee in its profit & loss account and disclosed in its computation of total income. It was the prayer that the order of the ld. CIT(A) is liable to be held.

We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the assessee has earned derivative income of Rs.2 crores. The assessee has offered the said income in its P&L account. The assessee has not claimed any losses to be set off against the said income. The entire income has been offered by the asessee and has been offered to tax. There is no expenditure specific being set off against the said income. The ld. CIT(A) also recognizes that the security transaction tax has been paid by the assessee in respect of the transaction which has generated the said income of Rs.2 crores. A perusal of the facts clearly shows that the AO while completing the assessment has made the addition of Rs.2 crores without reducing the same from the P&L account when he has alleged the same to be an undisclosed income. This being so, we are of the view that admittedly the said amount of Rs.2 crores which has been added by the AO is a double addition. Further, the assessee has also

In the result, ITA No.438/RAN/2024 is dismissed.

This is an appeal filed by the revenue against the order of the ld. CIT(A)-3, Patna, dated 25.09.2024 for the assessment year 2015-2016

Shri Akshay Ringasia ld. AR appeared on behalf of the assessee. Shri Sandipan Khan, ld. Sr. appeared on behalf of the revenue.

It was submitted by the ld. Sr. DR that there were two additions in the course of assessment, the first one of Rs.1,06,17000/- which was disclosed by the assessee as income from derivatives. It was the submission that the issue is identical to the issues in ITA No.438/RAN/2024. As the issue is identical, respectfully following the decision of the coordinate bench of this Tribunal in the case of ITA No.438/RAN/2024, on identical findings the addition as deleted by the ld. CIT(A) in respect of addition of Rs.1,06,17,000/- and the corresponding alleged

It was the further submission that the second addition was in respect of an amount of Rs.75 lakhs received by the assessee from the shell companies, namely, Banga Bhoomi Highrise Pvt. Ltd. and M/s. Tailand Datasoft Pvt Ltd. It was the submission that no details in regard to the said transaction has been produced by the assessee before the AO. It was the submission that the loan taken from the said two shell companies were repaid within three days. It was the submission that the ld. CIT(A) has deleted the addition by holding that all the details have been produced. It was the submission that the issues may be restored to the file of the AO so as to enable the assessee provide the details before the AO.

In reply, ld. AR of the assessee submitted that these are very old transactions and it would not be possible for the assessee to provide all the details.

We have considered the rival submisisons. A perusal of the assessment order clearly shows that the AO has categorically recorded that the assessee has not provided any explanation in respect of the said loan taken from the two entities. A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) recognizes that the assessee has received a loan of Rs.50 lakhs from Bangabhoomi Highrise Pvt. Ltd. and Rs.25 lakhs from M/s. Tailand Datasoft Pvt. Ltd.. It is noticed that the ld. CIT(A) records that the assessee has furnished the identity details of the lenders in the form of loan confirmations, ledger of the lender in the books of accounts,

In the result, appeal of the revenue in ITA No.439/RAN/2024 is partly allowed for statistical purposes.