RADHESHYAM LALURAM KABRA,AHMEDABAD vs. DCIT,CIRCLE (2)(1)(1), AHMEDABAD, AHMEDABAD

ITA 1186/AHD/2026Status: DisposedITAT Ahmedabad15 October 2026AY 2012-137 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the undisputed position is that the assessee disclosed speculative business profit and furnished the speculative profit ledger. The assessee's specific explanation was that Rs. 14,92,993/- in the ledger represented the gross commodity transaction, and Rs. 14,81,826/- was the net amount received after deductions. The AO treated these as separate transactions because the exact net amount was not separately reflected in the ledger. The Tribunal found that before sustaining the addition, the actual nature and correlation of the two amounts required proper verification with reference to contract notes, broker ledger, bank statement, and corresponding book entries. Since the assessee claimed it was connected to commodity trading and furnished the speculative ledger, the matter could not be conclusively decided solely on the difference between gross and net amounts. However, as the assessee did not furnish all requested documents, factual verification was also needed. In the interest of justice, the Tribunal restored the issue to the AO for fresh examination, directing verification of whether the net receipt represented the net proceeds of the gross commodity transaction already accounted for. The quantum appeal was allowed for statistical purposes. Consequently, the penalty appeal under section 271(1)(c) was also allowed as the basis for the penalty no longer survived, with liberty to the AO to initiate fresh proceedings if warranted.

What were the facts?

The assessee, Radheshyam Laluram Kabra, filed appeals against orders of the CIT(A) for Assessment Year 2012-13, which upheld additions made by the Assessing Officer (AO) under section 147 r.w.s. 144B. The AO had reopened the assessment based on information from an investigation wing, suggesting the assessee received Rs. 14,81,826/- from a share broker allegedly involved in accommodation entries. The assessee claimed this amount was part of commodity trading and already accounted for in speculative business income. The AO noted a discrepancy between the Rs. 14,81,826/- received and a Rs. 14,92,993/- transaction in the speculative ledger, treating the former as unexplained income. The CIT(A) confirmed the addition, relying on investigation reports and the difference between the amounts.

What were the issues?

1. Whether the addition of Rs. 14,81,826/- by the Assessing Officer, confirmed by the CIT(A), treating it as unexplained income received from a share broker, is legally sustainable, considering the assessee's claim that it represents net proceeds from commodity trading already accounted for in speculative business income? Assessee's contention: The amount of Rs. 14,81,826/- received through the bank account is the net amount after deducting charges from the gross commodity transaction of Rs. 14,92,993/- with AA Plus Share Broker, which was already disclosed in the audited books and speculative business income. The addition arises from a non-reconciliation of gross and net amounts, and the matter was not properly verified despite furnishing the audit report and speculative ledger. Revenue's contention: The revenue's primary contention, as reflected in the AO's and CIT(A)'s orders, is that the receipt of Rs. 14,81,826/- is distinct from the Rs. 14,92,993/- recorded in the speculative ledger and was not reflected in the books, suggesting it was unexplained income. They relied on investigation reports regarding accommodation entries.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI GANGADHAR PANDA

For Appellant: Shri Pritesh Shah, CA
For Respondent: Smt. Ananya Kulshresth, Sr. DR
Hearing: 18.08.2026Pronounced: 15.10.2026

PER GANGADHAR PANDA - ACCOUNTANT MEMBER:

Both appeals filed by the same assessees are directed against the separate orders dated 17.03.2026 passed by the Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as the “Ld. CIT(A)”), National Faceless Appeal Centre, Delhi [in short “NFAC”], Delhi for the Assessment Year 2012-13 arising out of the assessment orders dated 25.09.2021 completed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (“the Act”). Since both the appeals involved identical/connected issues, the same were heard together and are, therefore, being disposed of by way of common

The order continues below.

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