LEELA DEVI BUMB,AJMER vs. ITO, BEAWAR

PER SHRI BHAGCHAND, AM This appeal by the assessee is directed against the order of Ld. CIT(A) Ajmer,

dated 29.09.2016 pertaining to the Assessment Year 2012-13. The return of income

filed on 25.12.2013 declared income at Rs. 1,82,390/-. The assessee had entered

into commodity exchange transactions totaling to Rs. 7,38,08,37,087/- in name of

assessee and Pankaj Traders Prop. of assessee (Leela Devi Bumb). Assessee had

not disclosed these transactions in her return of income. Assessee had also

deposited case of Rs. 56,30,000/- in here bank a/c held with SBBJ Bijainagar. AO

made addition of Rs. 56,30,000/- and CIT(A) had confirmed the additions.

Now, the assessee has raised the following grounds of appeal that reads as under:-

2 ITA No. 909/JP/2016. Smt. Leela Devi Bumb.

“Under the facts & circumstances of case the Ld. CIT(A) has erred in:-

relied upon and also the various facts available on the records.

commission and brokerage and interest income. It is also claimed that the assessee

was sub-broker of MCDX/NCDX in the name of M/s Pankaj Traders as prop. It was

also claimed that the main broker was M/s Sishodiya Future, Ajmer. She has also

claimed that assessee was taking reasonable margins from its customers in cash and

used to allow these clients to book the transaction for operation. In case of

loss/profit on such operations, the loss/ profit were debited/credited to the account

of said person against margins which are settled in cash. It is also claimed that the

maximum parties have suffered loss and assessee was working only a sub-brokers.

The relevant document has been torned off due to loss. It is pertinent to note that

3 ITA No. 909/JP/2016. Smt. Leela Devi Bumb.

there is no reliable evidence/documents which could establish that the assessee was

working as sub-broker on behalf of the certain clients from whom she claimed to

have received the cash to settle the margins. It is also pertinent to note that no

books of account were produced before the Assessing Officer even in the remand

proceedings. The Ld. A/R has relied on the submissions made before the lower

authorities and reiterated that the assessee was a sub-broker and the margins were

received in cash from clients which were deposited in the bank accounts.

The assessee has not opened any client’s accounts, as per the direction/guidance of

SEBI. The persons who were examined by the income tax authorities were also

failed to produce any supporting evidence with regard to the transactions claimed to

have been done through the assessee as sub-brokers. It is also a pertinent to note

that all persons denied having any bank account, PAN No., except Shri Prakash

Bumb who is husband of the assessee. It is also pertinent to note that no bills were

issued to the clients for commodities transactions. In the statement recorded Smt.

Leela Devi has categorically stated that she is not having any bills or any

documentary evidence in support of claim that the transaction has been done on

behalf of the clients. The receipts for cash claims to have been received from clients

were also not produced. In her statement she had categorically denied regarding

existence of any such receipts. It is also pertinent to note that no bills/documents

from M/s Shishodiya Futures the main broker were produced. She has simply stated

that she has torned off the documents due to loss. Thus, there is nothing on record

4 ITA No. 909/JP/2016. Smt. Leela Devi Bumb.

which could substantiate the claim of assessee that she was doing sub-brokers and

the case deposited in bank pertain to the clients.

The Ld. CIT(A) has decided this issue by observing as under:-

“4.3 I have gone through the assessment order, statement of facts, grounds of appeal, written submission, remand report and rejoinder carefully. It is seen that either during the course of assessment proceedings or remand proceedings, the appellant has not been able to substantiate with documentary evidence, the nature and source of the cash deposits of Rs. 56,30,000/- made in the bank account of the appellant. Though the appellant claimed that the source of cash deposits was the persons on whose behalf she had carried out transactions at NCDX and MCX but the appellant failed to prove her contention with the help of any documentary evidence. Therefore, the action of the AO treating the entire cash deposits of Rs. 56,30,000/- as unexplained investment of the appellant is held to be fully justified and in accordance with the provisions of law. The appellant has also argued that loss of Rs. 55,69,580/- incurred by the appellant on transactions carried out through NCDX and MCX should be allowed against the addition of Rs. 56,30,000/- made by the AO u/s 69. I have considered this argument of appellant carefully. It is an undisputed fact that loss of Rs. 55,69,580/- is a loss sustained in a speculation business. Therefore, I am of the considered view that the set-off of this loss cannot, be allowed against the income of Rs. 56,30,000/- taxed u/s 69 because section 73(1) clearly provides that "Any loss, computed in respect speculation business carried on by the assessee, shall not be set off except against profits and gains, if any, of another speculation business”. As the, income of Rs. 56,30,000/- taxed by the AO u/s 69 is not a profit from speculation business carried on by the appellant, therefore, it is held that no set-off of the loss of Rs. 55,69,580/- incurred by the appellant on speculative commodity

5 ITA No. 909/JP/2016. Smt. Leela Devi Bumb.

transactions carried out trough NCDX and MCX is admissible to the appellant against the income of Rs. 56,30,000/-. Either during the course of assessment proceedings and appellate proceedings, the assessee has not been able to produce any documentary evidence to show that the transactions carried out in the ID and account of the appellant through NCDX and MCX were carried out by her on behalf of some other persons. From the statement of transaction provided by M/s Sisodiya Futures, Ajmer and the statement of Smt. Sushila Sisodia, partner of M/s Sisodiya Futures recorded u/s 131 by the AO on 13.03.2015, it is clear that all the transactions were carried out by the appellant herself. Therefore, the contention of the appellant that the transactions to the tune of Rs. 7,38,08,37,087/- were carried out by her on behalf of some other persons is not found to be acceptable. Hence, this contention of the appellant is also rejected. This ground is dismissed.”

claimed of assessee that she was a sub-broker and cash deposited in bank belong to

the clients, we find no fault in the order of Ld. CIT(A). In our considered view, the

assessee has not able to file any documentary evidence with regard to the nature

and source of the cash deposits in her bank account of Rs. 56,30,000/-. Therefore,

the CIT(A) has rightly sustained the additions. As far as alternative plea of the

assessee with regard to the set off of the loss to be allowed against the income of

Rs. 56,30,000/- taxed u/s 69 is also against the legal provision of the Act. This loss

was a ‘speculation loss’ and it could be set off only against ‘speculation income’.

Therefore, the CIT(A) has rightly denied the benefit of set off to the assessee. The

6 ITA No. 909/JP/2016. Smt. Leela Devi Bumb.

final plea of the Ld. A/R that the matter may be restored to the file of the AO also

cannot be accepted for the reasons that the assessee has been provided sufficient

opportunity before the authorities below to produce necessary documents in support

of her claim. Any remand of the issue to the file of the AO as this stage shall be

against the basic tenants of law.

Order pronounced in the open court on 08/12/2017.

Sd/- Sd/- (fot; iky jko]) (Hkkxpan]) (Vijay Pal Rao) (Bhagchand)

U;kf;d lnL;/Judicial Member ys[kklnL;/Accountant Member

Jaipur

Dated:- 08/12/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

7 ITA No. 909/JP/2016. Smt. Leela Devi Bumb.