M/S. VISION MILLENIUM EXPORTS P. LTD,MUMBAI vs. DCIT, CENTRAL CIRCLE- 7(2), MUMBAI

IN THE INCOME T

BEFORESHRI SAN
SHRI PRABHASH
IT M/s
Vision
Mille
Exports P. Ltd.
Jn-1, 65, b-5, sec – 9, V
Navi
Mumbai
400
Maharashtra

थायी लेखा सं./जीआइआर स
Appellant/अपीलाथ

Appellant by :
Respondent by :

Date of Hearing
Date of Pronoun

PER PRABHASH SH

Thepresent appeal em
12.03.2020is filed by t
Learned Commissioner o referred to as “CIT(A)”] p
Income-tax Act, 1961 [he passed by the Dy. Comm
Mumbaifor the Assessme
TAX APPELLATE TRIBUNAL “F’

MUMBAI

NDEEP GOSAIN, JUDICIAL MEM
&
SHANKAR, ACCOUNTANT MEM

TA 1645/MUM/2020
(A.Y. 2015-16) enium
Vashi,
703, v/s.
बनाम
DCIT, Central C
Room
No.
655
Bhawan, M.K. Roa
400020, Maharash
सं./PAN/GIR No: AAACV6970
..
Respondent/ तवाद
Shri Abhishek Khandelwal,AR
Ms. Neena Jeph, (CIT DR)
14.01.2025
ncement
10.02.2025
आदेश / O R D E R

ANKAR [A.M.] :- manating from the appellate ord the assesseeagainst the order passe of Income-tax (Appeals)49,Mumbai[h pertaining to assessmentorder u/s. 143
ereinafter referred to as “Act”] dated2
missioner of Income Tax, Central C ent Year [A.Y.] 2015-16. ’ BENCH
MBER
MBER ircle -7(2),
5,
Aaykar ad, Mumbai htra
0B
द
der dated ed by the hereinafter
3(3) of the 21.12.2017-
Circle 7(2),

tated here that in this case,vide orde dated 22.08.2023,the appeal w g the appeal of the asse ntly on an application by the assessee
No.645/Mum/2023.Accordingly,th has been fixed and after accor o both the parties is being decided here ds of appeal are as under:- he circumstances of the case and in law the the AO's action of disallowing the busines ntract settlement by holding the same as not he circumstances of the case and in law the the AO's action of holding the business peculative loss and thereby, not allowing ulative business income.
se are that theassessee filed its return total loss of Rs. 25,50,57,463/-.Durin he assessee derivedincome from c d that the assessee had claimed lo unt of loss on commodity trading. The d on the issue of loss observed and d sessment proceedings, it was observed that the 98,500/- on account of loss on shares/commod account of expenses related to the loss on the com e called for and it was submitted that the compa
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er in ITA as earlier essee ex e,the order he original rding due e.
e Ld. CIT(A) s loss of Rs t genuine.
e Ld. CIT(A) loss of Rs.
g the set-off of income ng the year ommodity oss of Rs.
Assessing decided as assessee had dity and this mmodity. The any has made six different purchase cont
M/s Arabesque Mercantile dates during FY 2014-15. 26,88,38,500/- towards th settlement of contract and p did not happen and it was this transaction also not Exchange. The overall nat of these facts, the assessee
Rs. 26,88,98,500/- should of being bogus and non-gen
In response to this the VME
“With reference to your notice d course of hearing, we ex claimed loss of Rs. 26,88
should be allowed as a b
The summary of the said submis
We are in to the business of ag various contract for pr guard against loss throu for delivery of goods. W written’.
We also submit that we h with buyer. We further debit notes for Rs. 26,8
delivery of goods as per settlement” in our profit
We submit that the dep overall nature of transa by us to prove that the tr settlement of contract is loss arising out of suc against the speculation department is erroneo understanding of the m between a Buyer and Se
We submit that during t
M/s Arabseque Mercant the buyer) for sale of co title to the contracted g the prevailing market p
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

tracts of commodity 'coriander' with another co e Pvt. Ltd. (AMPL) and M/s Betul Oil Ltd. (BOL
It was further submitted that the company has he price difference of the coriander commodity o price difference. In this physical movement of th s a non-delivery based transaction. It was also o t being carried out at any recognized Comm ture of the transaction appeared to be non- genu was requested by the AO to show cause as to w not be disallowed and added back to total incom nuine.
EPL filed its submission which is reproduced as u dated 11/12/2017, we would like tosubmit that du xplained the facts of the case and also explained
8,98,500/-on account of trade settlement is genu business loss.
ssions are as follows:
gro commodities. During the course of busines rocurement as well as supply. We also do cont ugh future price fluctuations in respect of other c
We further submit that above contracts may be in had engaged/entered into contracts for sale of co r submit that due to price difference, buyer ha
88,98,500/- and Rs. 60,000 for other expenses f r the contract which was shown as “loss from t & loss account.
partment has proceeded mainly on the premise action appear to be non-genuine as noevidence p ransaction is genuine and the price difference ar on nature of ‘speculation transaction’ and theref h purchase and sale transactions are only be n profit. We submit that this objection raised ous in as much as, the same is without manner in which commodity business are tra ller in the trade.
the year 2014-15, we have entered into six contra tile Pvt Ltd. (i.e. the buyer) & M/s Betul Oil Lim ommodity "Coriander". In terms of the said cont oods is transferred to buyer by us at a price (g price) agreed between the parties, however, the P a g e | 3

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ompanies i.e.
L) on various s debited Rs.
on account of he commodity observed that modity Stock uine. In view hy the loss of me on account under:- uring the why the uine and ss we do tracts to contracts n ‘oral or oriander as issued for non- contract that the provided rising on efore, the e set off d by the proper ansacted acts with mited (i.e.
tract, the generally physical delivery of the goods sh expires (known as the d etc., from the date of en price is required to be p date of Invoice and Lo
It may be noted that th keeps fluctuating due to the market price prevai into contract would eithe the delivery period. Man purchaser offers to resel
In case we agree then th a Debit/Credit note to a price and the prevailing our business.
We submit that in the p for buy of Coriander. Ho contracted goods durin delivery of the goods. B arising due to such tran note to us for the pric transaction. The contrac buyer to us, Ledger Co
Loss, Balance Sheet, Li furnished by us to your again enclosed to this rep
These documents prov transaction entered by u all the necessary ingre existent.
We also submit the buye from contract settlemen taxation by the buyer in We submit that during such trading in goods w books as “Loss from con above, the said loss is between the sale andpur words, it is the loss by buying the same back at In view of the above sub the Buyer is an activity
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

all be given to the buyer at any time before the delivery period) which could be one month, two ntering into the contract. Further, 100% of the paid by the buyer to us within 3 working days f rry Receipt/handover of Warehouse Receipt en he price of the underlying commodity i.e. the Co o market influence of demand and supply and, n iling agreed upon by the parties on the date of er increase or decrease several times before the e ny a times on the date of taking delivery of the go ll the same to seller at the spot price prevailing t he seller does not supply the goods and buyer/we account for the price difference between the co g market price, the loss/ income is being integra present case the buyer had entered into contract owever, since, there has been increase in the pri ng the delivery period; we have not given
But we have buy back the same and the price di nsaction is paid by us. We submit that buyer iss ce difference payable to buyer on account of cts entered by us with the buyer, the Debit Note i nfirmation from buyer, Income Tax return, Pr ist of Directors and Shareholder of buyer are r good office. However, sample copies of the s eply.
ve that transactions are genuine. In our c us with the buyer is a genuine business transac edients for nature of speculation transaction a er has not recoded said income in their books a nt” and the said income has already been off its computation of income.
the year 2014-15, we have loss of Rs. 26,88,98, with the buyer and the said loss is recorded by u ntract settlement” under Purchase Accounts. As ex s nothing but the price difference/profit/Loss rchase transaction entered by us with the buyer.
y us selling the goods at a higher price and th t a lower price.
bmissions, we submit that the contract entered by y of trading in goods and not a speculative tran
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contract o months contract from the ndorsed.
oriander naturally entering expiry of oods, the that day.
prepare ontracted al part of t with us ice of the physical ifference sue debit the said issued by rofit and already ame are ase, the ction and are non- as “profit fered for ,500/-on us in our xplained s earned
In other hereafter y us with nsaction,

We humbly pray before interest of justice and eq
6.1 The details of the c commodity (Badami Wh
Contract No.
Part y
Da
BOL/Agri/Vision/
03/32
BOL
30
BOL/Agri/Vision/
03/30
BOL
29
AMPL/Agri/Visio n/03/29
AMP
L
27. AMPL/Agri/Visio n/03/23
AMP
L
23. BOL/Agri/Vision/
03/22
BOL
23. BOL/Vision/BOL/
03/21
BOL
22
TOTAL
From a perusal of the de contract has no rationale at all a numbers given to the contracts undergone 20 such contracts e contracts. Copy of one of the Annexure I.
The above said contract broker involved in whole of the Betul Oil Ltd. (BOL) and there w
The VMEPL is unable t before the numbers given to the The contracts were mad seller and buyer are seen on seco
This buyer party AMPL
VMEPL and AMPL.
There are transactions o
The shareholders of VME
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

e your good self to kindly drop the subject poin quity.”
contracts undertaken by the VMEPL for sale hole Dhaniya) are as under:- ate
Rate(Rs
.)/MT
Qty
MT
Contra ct
Period
(Days)
Amoun
.05.2014
91,650/-
1500
60
13,74,7
.05.2014
90,450/
-
2000
60
18,09,0
.05.2014
90,100/
-
1500
60
13,51,5
.05.2014
88,650/
-
2500
60
22,16,2
.05.2014
88,900/
-
2500
60
22,22,5
.05.2014
88,700/
-
2300
60
20,40,1

110,14, etails of the contracts, it is manifest that the num as VMEPL has executed multiple contracts durin s are illogical and not in sequence. It appears t arlier but nothing was on record to show the contracts is also enclosed along with the ass ts were made only between VMEPL and AMPL e process. Another contact was made only betw was no broker involved in whole of the process to explain and produce such earlier contracts above mentioned contracts.
de on the letter head of the AMPL and BOL and s ond page of the contracts.
is well known to the VMEPL asseen from the ba of unsecured loan between VMEPL, AMPL.
EPL and BOL are from same family.
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nt in the of coriander nt(Rs.)
75,000/-
00,000/-
50,000/-
25,000/-
50,000/-
10,000/-
,10,000/- mbers given to the ng FY 2014-15. The that the STPL has earlier numbered essment order as and there was no ween VMEPL and bearing numbers signatures of only alance sheet of the The VMEPL has made inexplicably there was no advan of the contract.
After lapse of 60 day abovementioned six contracts. T
Contract No.
Date
BOL/Agri/Vision/03
/32
29.07.20
BOL/Agri/Vision/03
/30
21.07.20
AMPL/Agri/Vision/0
3/29
28.07.20
AMPL/Agri/Vision/0
3/23
28.07.20
BOL/Agri/Vision/03
/22
22.07.20
BOL/Vision/BOL/03
/21
21.07.20
TOTAL
All the above said contr by the assessee in profit and loss
Copy of one of the deb
Annexure - II. These debit notes identification numbers on them notes, it is seen that even the different. The same can be seen a There was no broker inv
Even after the settleme
VMEPL, not only this; payment
The ledger of AMPL in th
Date
Particulars
23/04/2014
Sales Coriand
25/04/2014
Sales Coriand
24/06/2014
Purchase Cori
28/06/2014
Purchase Cori
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

contract of coriander sale approximately of R nce of a single rupee given by AMPL or BOL to V ys AMPL has raised debit notes with respec
The details are as under:-
Contract
Rate(Rs.)
/MT
Market
Price
(Rs./MT)
Quantit y
MT
Price
Diffe
014
91,650/-
1,11,400
1500
19,75
014
90,450/-
1,11,400
2000
20,95
014
90,100/-
1,11,400
1500
21,30
014
88,650/-
1,11,400
2500
22,75
014
88,900/-
1,11,400
2500
22,50
014
88,700/-
1,11,400
2300
22,70
racts were settled and the loss of Rs. 26,88,38,5
s account.
bit notes is also enclosed along with the asse s were printed on the letter head of AMPL and m. After the minute observations of the debit n reference contract numbers mentioned in deb after comparing the above two tables.
volved at any of the stage till the settlement of con ent of contract, no actual payment was mad was never paid from VMEPL or AMPL.
he books of VMEPL was called for and the same i
Vch. Type
Debit der
Sales Coriander
145987897
der
Sales Coriander
76940218
iander
Purchase Coriander iander
Purchase Coriander
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Rs. 110 Crores but VMEPL at the time ct to each of the e erence
Amount (Rs.)
50
2,96,40,000/-
50
4,19,00,000/-
00
3,19,63,500/-
50
5,68,75,000/-
00
5,62,50,000/-
00
5,22,10,000/-
26,88,38,500
500/- was claimed essment order as BOL without any notes and contact bit notes are also ntract.
de from AMPL to is as under:-
Credit
7300000
79800000

07/07/2014
Purchase Cori
10/07/2014
Purchase Cori
25/08/2014
Purchase Cori
18/09/2014
Purchase Cori
31/3/2015
Vision Milleni
Exports Pvt. L
Mumbai
31/3/2015
-do-
31/3/2015
-do-
It is observed that this tr coriander made from VMEPL to the last day of FY.
The whole of the transaction is contract settlement which was u
The VMEPL has net profit on sa the sale and purchase of share amount payable by AMPL to V against the sale bills of coriande
The contract settlement
'Commodity Stock Exchange' no can be done to cross check the ve
The documents purport government authorities and, he law - which is highly improbable
It is apparent that tra illegitimately reduce the tax liab contract note to the rate reflecte
This is not an independ commercially well acquainted w
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

iander
Purchase Coriander iander
Purchase Coriander iander
Purchase Coriander iander
Purchase Coriander ium
Ltd.
Journal
28,60,594
Journal
3,02,50,000

Journal
15,42,24,000
410262709
ransaction of contract settlement was adjusted a o AMPL during the same FY and the journal ent s bogus and manipulated to take the fictitious l ultimately adjusted against the huge profit on sal ale of shares amounting to Rs. 25,57,37,883/- du es on stock exchange is the business activity of VMEPL on account of loss on contract settlem er sale from VMEPL to AMPL and BOL.
t transaction was neither carried out at any or there any broker involved. Hence, no third p eracity of the claim.
ting to be an agreement is not stamped nor reg ence, those rights and obligations are not enfor e looking at the quantum of the transaction.
nsaction has been created as an afterthought bility. Since it is afterthought, the similarity of ra d on NCDEX platform is of no consequence.
dent transaction between the strangers but betw with one another. This increases the scope of man
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101295709
44693000
22950000
154224000
410262709
against the sale of try was passed on loss on account of le of shares.
uring the year and f the VMEPL. The ment was adjusted of the recognized party verification gistered with any rceable in court of t and a device to ate of coriander in ween two persons nipulation.

It is significant to no contract settlement b
Ultimately, therefore, ne
The contract settlement isolation. Enquiries and entities have manipulat way that there should no This itself makes it clear of a single rupee for the the commodity, this is lik
The essentials of a valid various judicial pronoun
1. Offer and acceptance:
In a contract there must accepting it. There must offer when

ote that the counter party i.e. AMPL, has but the said profit was set off against its l either of the parties have paid any tax on this tra by SCCPL and loss from the said transaction ca d verification reveal without an iota of doub ted the profits and loss in their constituent com ot be any tax on any of the profit.
r that the goods were never delivered nor there w transaction. The SCCPL also mentions that they ke doing business with own which is not permiss d contract as emanates from the Indian Contra ncements are as under:- t be at least two parties one of them making the o t thus be an offer by one party and its acceptance accepted becomes must intend to constitute legal relationship. It y one of them fails to fulfill his part of the prom he contract.
to create legal relationship, there is no contract or domestic nature which do not contemplate a ment must have the mutual consent i.e. they mu ame sense. This means that there must be conse s:
ment must be competent to contract. In other wo a contract.
he Act, "Every person is competent to contract w he law to which he is subject to and who is of s ntracting by any law to which he is subject."
alid contract is the consent of parties, which sho arties are said to consent, when they agree upon Sec. 14, the consent is said to be free, when it is n
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profit from the loss of business.
ansaction.
annot be viewed in bt that the group mpanies in such a was any movement y had bought back sible by law.
acts Act, 1872 and offer and the other e by the other. The agreement.
t arises when the mise, he would be t between parties.
legal relationship ust agree upon the ensus ad idem (i.e.
ords, they must be who is of the age of sound mind and is uld be free. Under n the same thing in not induced by any of the following:- (i) coe mistake.
6. Lawful consideration:
Consideration is known contract. A promise to would not be enforceable
Consideration need not wagering contract' or "b
7. Lawful objects:
According to Sec. 10, an consideration and lawfu objects are not lawful:-
(i) If it is forbidden by la
(ii) If it is against the pro
(ii) If it is fraudulent;
(iv) If it damages someb
(v) If it is in the opinion
Thus, any agreement, if a valid contract.
8. Agreement not expres
An agreement to become declared void by any law

In view of the above fact i.
The settlement t platform,
CommodityStock ii.
This transaction w
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

ercion, (i) misrepresentation, () fraud, (iv) undu
:
n as 'something in return'. It is also essential fo do something or to give something without an e at law and, therefore, would not be valid.
t be in cash or in kind. A contract without c betting'. Besides, the consideration must also be l n agreement may become a valid-contract only, i ful object. According to Sec. 23, the following co aw; ovisions of any other law; body's person or property; or of court, immoral or against the public policy.
f it is illegal, immoral, or against the public polic ssly declared void:
e a contract should not be an agreement which h w in the country, as it would not be enforceable a lity of performance:
alid contracts must be certain, possible and th possible. An agreement to do something imposs e oral or in writing. When the agreement is in rmalities as to attestation, registration. If the ag ary legal formalities, it cannot be enforced by law ts, the following conclusions can easily be made.
transaction have not happened on any i.e.
on a kExchange/Broker/Association.
was non delivery based.
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ue influence, or (v) r the validity of a nything in return consideration is a lawful.
if it is for a lawful onsiderations and cy, cannot become has been expressly at law.
hey should not be sible is void under n writing it must greement does not w.
of the official recognized iii.
No broker was in iv.
The two parties w v.
No advance wha was given.
vi.
No payment wa thereafter.
vii.
The counter par contract settleme viii.
The contracts ent ix.
The STPL had transactions wer neutralising them established.

In view of the above facts entered by VMEPL are void
26,88,38,500/- on account o not allowable to VMEPL.

43(5) speculative transa purchase or sale of any ultimately settled otherwi or scrips:
Provided that for the purp

(a) a contract in respect o the course of his manuf through future price fluctu manufactured by (b) a contract in respect therein to guard agains fluctuations; or (c) a contract entered int
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

nvolved at any of the stage of the transacti were commercially well acquainted with e tsoever or any type of payment at the ti as ever made at the conclusion of the rty has also not paid any tax on the p ent.
tered by STPL and AMPL are itself void.
huge profit from sale of shares and re manipulated and entered purely to eva m. In this way, the complete ‘cycle’ of mod s and circumstances, it is proved beyond doubt d and purely non- genuine and bogus and hen of loss from coriander contract settlement is also ntioned transaction of contract settlement loss ake of academic discussion, yet the explanatio e assessee has entered into a transaction whic d out at any of the recognized stock exchange
Commodity Transaction Tax was paid. Acco terised as 'speculative transaction within the me show caused as to why the loss claimed by as the same was a loss from speculation busines uced in earlier para and the same is found to ct reads as under:- action" means a transaction in which a cont commodity, including stocks and shares, is pe ise than by the actual delivery or transfer of th poses of this clause- of raw materials or merchandise entered into by facturing or merchanting business to guard uations in respect of his contracts for actual deliv him or merchandise sold by t of stocks and shares entered into by a deale t loss in his holdings of stocks and shares th to by a member of a forward market or a stock
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on.
ach other.
ime of contract e contract and profit from this d these bogus ade the taxes by dus operandi is that the contracts nce the loss of Rs.
o non-genuine and s is considered as on offered by the ch is non delivery and no Securities ordingly, the said eaning of 43(5) of it should not be ss. The reply of the be devoid of any tract for the eriodically or he commodity y a person in against loss very of goods him; or r or investor hrough price k exchange in the course of any transac loss which may arise in th

(d) an eligible transaction
(ac) of section 2 36 of th carried out in a recognize

(e) an eligible transaction a recognized association chapter VII of the Finance shall not be deemed to be a In view of the aforesaid it transaction. Accordingly, loss.
None of the exceptions en applicable in the case of V

(a) a contract in re the course of his manuf future price fluctuation manufactured by him or The VMEPL has not eng there was no actual deliv
There was no (b) a contract in respec therein to guard again fluctuations; or The VMEPL was not hav sale with AMPL.
Also, there is nothing on to guard against loss in (c) a contract entered in the course of any transa loss which may arise in The VMEPL is neither a mentioned transaction i guard against loss whic

(d) an eligible transactio
(ac)] of section 2 36 of carried out in a recogniz
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

ction in the nature of jobbing or arbitrage to g he ordinary course of his business as such membe n in respect of trading in derivatives referred to he Securities Contracts (Regulation) Act, 1956
d stock exchange, n in respect of trading in commodity derivatives c
(which is chargeable to commodities transacti e Act, 2013 (17 of 2013) a speculative transaction.”
t is clear that the transaction under consideratio the loss arising from such speculative transactio numerated from subsection (a) to (e) of section 4
VMEPL. This is demonstrated as under:- espect of raw materials or merchandise entered i facturing or merchanting business to guard aga ns in respect of his contracts for actual d r merchandise sold by him; or gaged in any of the manufacturing or merchan very of goods manufactured or merchandise by V o raw material possessed w ct of stocks and shares entered into by a deale nst loss in his holdings of stocks and shares t ving the stock of 12300 MT at the time of enterin n the record which shows that the VMEPL entered his holdings and there was no ‘holding’ itself in a nto by a member of a forward market or a stock action in the nature of jobbing or arbitrage to g the ordinary course of his business as such mem member of a forward market nor of a Stock Exc is neither in the nature of jobbing nor an arbitra h may arise in the ordinary course of its business on in respect of trading in derivatives referred to the Securities Contracts (Regulation) Act, 1956
zed stock exchange;
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guard against er; o in clause 35
(42 of 1956) carried out in ion tax under on is a speculative on is a speculative
43(5) of the Act is into by a person in ainst loss through delivery of goods nting business and VMEPL.
with VMEPL.
er or investor through price ng into contract of d into the contract actual.
k exchange in guard against ber; change. The above age and never as a s.
o in clause 35
6 (42 of 1956)

The contract settlement carried out in a recogniz

(e) an eligible transactio in a recognized associa under chapter VII of the The contract settlemen carried out in a recogn association as there is no In light of the discussion
VMEPL on account of lo ambit of loss from specula

Accordingly, the loss of be set off against the pro

In view of the above fa genuine loss and, added

Without prejudice to the a treated as a speculative lo

t transaction was not an eligible transaction a zed stock exchange.
on in respect of trading in commodity derivative ation (which is chargeable to commodities tra
Finance Act, 2013(17 of 2013) t transaction was not an eligible transaction a nized stock exchange and not even carried ou o third party involved at any of the stage of the t as made as foregoing, the loss of Rs. 26,88,38, oss shares/commodities in its profit and loss a ation business within the meaning of section 43(5
f the Act:- ed in respect of a speculation business carried o xcept against profits and gains, if any, of an f Rs. 26,88,98,500/- is a loss in speculation busin ofit in speculation business.
acts, Rs. 26,88,98,500/- is treated firstly as a d back to the total income of the assessee.
above and in the alternate, the aforesaid loss i ss within the meaning of section 43(5) of the Act.
ated here that the ld.CIT(A) while the contents of the assessment order onsidered the submissions of the a om endorsing the findings of the AO g features of the case in support of his s not genuine:
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as it has not been es carried out ansaction tax as it has not been ut in a recognized transaction.
,500/- claimed by ccount within the 5) of the Act.
on by the assessee, nother speculation ness and can only sham and a non- is also liable to be .”
deciding the on pages 3 to aseesseein the O,theld.CIT(A) s findings that 1. Numbers given in con produce earlier contra contract.
2. Contract settlement t
Commodity Stock Exc
3. Documents purportin government agency,th
4. Transactions with kno probability of manipu tax evasion.
5. Absence of any mone given neither any p transaction completed
6. Assesee in the busines impugned transaction
7. Trading in coriander previous transaction o
8. Claim that assessee fa sharply.But could not when the prices were 9. Also an another group also entered into tran with whom the asse premeditatae(para 6.3

ntract note illogical and not in sequence.A acts bearing numbers before the number gi transaction neither carried out at any of change nor any broker was involved in the tr ng to be contracts were not stamped nor hus not enforceable in any court of law.
own parties with existing business relations ulation and adjustment in mutual beneficial etary transaction during the whole process payment made for settlement of the con d at the fag end of the financial year through ss of shares with substantial profit during t ns only to reduce the tax liability.
r is not its regular business.Asessee faile of forward contract in coriander.
ailed to deliver goods for the reasons that pr t explain why it failed to deliver the good increasing.
up concern i.e Shreyans Credit and Capital L nsactions with ArbesqueMerchantileP.Ltd on essee also entered into contract with w
3.14)
A) has also placed reliance on va s and Apex court in support of his co taken was simply smokescreen to ca arb of sale of commodity which was no all the queries of the AO to prove other
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Assessee failed to iven to aforesaid f the recognized ransactions registered with s supporting the in the matters of s as no advance ntract value.The h journal entries.
the year and the ed to show any rocess had raised ds even partially
Ltd:SCCPL) had ne of the parties which was also arious judicial onclusion that arry out bogus ot real and the rwise.

ative plea of the assessee that the loss as wrongly treated as loss from specula concerned,in paras 7.1 to 7.3,the co o the submissions made by the assess oncluding para 7.3,the ld.CIT(A) obse non genuine the ground was academi wever,he endorsed the findings of th to be treated as Speculation loss u/s of hearing before us,the ld.AR of the ments as made before the authorities gned transactions were genuine and ease in the prices of coriander.It is cla mmodities and to guard against loss cts are entered into.The contracts co ued that the buyers have duly disclose of income and offered for taxation.It modity transactions need to be done o xchange only.In support of the genui e submitted contract notes,debit pleaded that the action of the AO
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arising due to ation business ontents of the see have been erved that loss ic and did not e AO that the s 43(5) of the e assessee has s below.It was the loss arose aimed that the s due to future uld be oral or d the profit in is argued that on platform of ineness of the notes,ledger is based on presumptions only.Per co of the lower authortities.
7. On careful considera and the observations of submissions,we find tha their findings in any ma mad before the revenue a in the assessment orde discussions emanating fr orchestrated manner a transactions indulged in loss from alleged transa failed to rebut the CIT(A).Thegenuineness assessee in any manner.
7.1 From the facts n that the transactions transparent,entered into win situation for all of from share transactions, losses and disclosed negl
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

ontra,theld.CIT(DR) supported findin ation of all the relevant facts of the cas the ld.AO as well as ld.CIT(A) and at the assessee has miserably failed anner apart from harping on the sam authorities.On the other hand,we fin r also on the appellate order.From rom the order, it is evident that the a andin a bid to reduce its tax liabil this whole exercise of the claiming a actions in commodity derivatives.The findings and observations of t of the transactions has not been p narrated in the preceedingparas,it is q resulting in such a huge loss with known parties in a collusive man them.While the assessee has set off other two parties have set off substa ligible income in their respective retu
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ngs and orders se,the findings also the rival to controvert me contentions d no infirmity m the detailed assessee in an lity for share non- existent e assessee has the AO and proved by the quite apparent s are not nner with win- f huge income antial business urns of income for the relevant yearfro impugned transactions.T recognized commodity e and therefore, not carr through member or an in laws, bye rules and regul commodity derivative in Contracts (Regulation) A made or directions issue which is supported by a t or intermediary to iden indicating in the contrac or bye-laws,unique trade under this Act.In the p manually made to suit th
7.2 An inference about th transactions has to be dr the record and having r payment as well as oth reasonably be drawn tha genuine. It is held that af
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

om the profit claimed to have earn
The transactions were admittedly not exchange platform through SEBI regi ried out electronically on screen b ntermediary, screen-based registered u lations of the recognized association n accordance with the provisions of Act, 1952 and the rules, regulations ed under that Act on a recognized ass time stamped contract note issued by ntity number allotted under the Act ct note, the unique client identity rule e number and permanent account nu present case,the self-serving contrac he convenience of the respective purpo he genuineness of apparent Commodi rawn on the basis of the circumstance regard to the conduct of the assess her material on the record, an inf at the Commodity Trade Loss transact fter considering the surrounding circu
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ned from the t done on any istered broker based systems under the bye- for trading in f the Forward s or bye laws sociation and such member t, every client es, regulations umber allotted ct notes were oses.
ity Trade Loss es available on see in making ference could tions are non- umstances and applying the test of hum appellant's Commodity T said that the explanatio payment has been rejecte
7.3 As observed by 3607/Mum/2011 Ass
Impex Pvt. Ltd,the pri record cogent material genuine transactions an company and are not me cogent evidences / docum various government and regulating transactions i and rules regulating the Forward
Contract(Regu
Agricultural Mandi's etc.
bodies/authorities as m transactions were genuin time and the losses , if in onus is on the assessee substantiate that these t
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

man probabilities it is rightly conclu
Trade Loss transactions is not genuine n offered by the appellant in respec ed unreasonably.
the co-ordinate Bench in the c essment Year 2006-07 M/s. S mary-onus is on the assessee compan l to substantiate that these tran nd were actually entered into by erely accommodation entries, by bring ments such as sauda books, records m other statutory /authorities authorit in agricultural produce under variou trade in agricultural commodities su ulation)
Act,1952,
State
Agricultu and proof of payment of any fee,taxe mandated under law to substantiat nely entered into by the assessee at ncurred were genuine losses . Further e company to bring on record cogen transactions are hedging transactions
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uded that the e. It cannot be ct of the said case of ITA
Sanika Agri ny to bring on nsactions are the assessee ging on record maintained by ties which are us legislations uch as APMC, ural
Boards, es etc to these te that these that point of r , the primary nt material to s to safeguard against future losses in c the assessee company on materials by way of con assessee company has to hedging transactions wer by proviso (a) to Section classified as speculative t brought on record any su
7.4 It may be state
No.1644/Mum/2020 M
Central Circle7(2), M facts and circumstances, appeal of the assessee wa

contracts based on actual delivery en n these commodities by bringing on re ntracts in the agricultural commodit execute on actual delivery basis again re entered into to guard against losses
43(5) of the Act to be taken out of pur transaction.The assessee in the presen uch cogent evidence to buttress its claim ed here that the coordinate bench in th
M/S. Shreya Credit & Capital P.
Mumbai dated 31 March, 2023on alm
,upheld the decision of the authoriti as dismissed.
Supreme Court in the case of Juggil as held that the income-tax authoritie orate entity and look at the reality of th cases the Court can lift the veil of co the economic realities behind the Officer has power to disregard the co on or to circumvent tax obligation or i High Court in PNB Finance Ltd.
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es are entitled he transaction orporate entity legal façade.
orporate entity to perpetuate v. Shri Shital

Prasad Jain [1983] 54 Co the corporate veil wherev interest of justice to pre instrument of fraud and itself might be disregard and for the ends of justic the appellant and others surrounding it reveal tha the revenue causing inju real purpose of the tra transaction in a manne otherwise.
8. On careful transactions, we conclude speculative in terms of evidences brought on rec probabilities is sufficien genuine.We are of the op onus cast upon him by Revenue Authorities rem assessee pertained to th
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

omp. Cas. 66 has held that the doctri ver necessary might be invoked by th event the corporate entity from bein the fundamental principle of corpora ded having regard to the exigencies of e. If the economic realities of a transa are arranged and the exigency of the c at the transaction has been entered on ustice to it, the authorities should loo ansaction and deal with the conseq er with which it should have bee appreciation of the facts surroundi e that they were areneither hedging tr the section 43(5) of the Act. The c cord by the AO on touchstone of prep nt to establish that these transactio pinion that the assessee has failed to the statute. Besides, finding of fact mained un-controverted that loss s hese forward transactions against wh
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ine of piercing e Court in the ng used as an ate personality f the situation action between circumstances nly to defraud ok behind the quence of the en dealt with ing the above ransaction nor circumstantial ponderance of ons are non- discharge the t given by the shown by the hich no actual delivery was made was no in these transactions in c entries only. We find that by the assessee through therefrom was prompted profit earned by the asse of authorities below are u
9. In the result,
Order pronounc SANDEEP GOSAIN
(ाियकसद /JUDICIAL MEM

Place: मुंबई/Mumbai
दनांक /Date 10.02.2025
Lubhna Shaikh / Steno

आदेश की ितिलिप अ ेिषत
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. आयकर आयु / CIT
4. िवभागीय ितिनिध, आय
Mumbai
5. गाड फाईल / Guard file.
ITA No. 164
M/S Vision Millenium Exports P. Ltd.

ot genuine. The alleged loss claimed b commodities were accounted for by w t the commodities transactions were n hout the year, thus this artificial lo d with an intent to 'set off' the sam essee in share transactions.According upheld.
, the appeal of the assessee is dismiss ced in the open court on 10/02/20
N
S
PRABHAS
MBER)
(लेखाकारसद/ACCO
त/Copy of the Order forwarded to :
t

यकर अपीलीय अिधकरण DR, ITAT,
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by the assessee way of journal not carried out oss generated me against the gly, the orders sed.
025. SH SHANKAR
OUNTANT MEMBER)

ITA No. 164
M/S Vision Millenium Exports P. Ltd.

स
ािपत ित //True Co
आदेशानुसार/ BY ORD

उप/सहायक पंजीकार (Dy./Asstt. R
आयकर अपीलीय अिधकरण/ ITAT
Mumbai.
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opy//
DER,