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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI INTURI RAMA RAO & SHRI PARTHA SARATHI CHAUDHURY
ORDER
PER INTURI RAMA RAO, AM:
This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 5, Pune [‘the CIT(A)’] dated 14.09.2018 for the assessment year 2015-16.
The appellant raised the following grounds of appeal :- “1. On facts and circumstances and as per provisions of the Act it be held that the derivative loss of Rs.57,78,133/- incurred by the Assessee on National Spot Exchange Ltd. is allowable as business loss and the same is deductable from the total income as claimed.
2. The assessee prays to be allowed to raise, add, modify, rectify the grounds of appeal at the time of hearing.”
3. Briefly, the facts of the case are as under :
The appellant is an individual deriving income from the business. The return of income for the assessment year 2015-16 was filed on 25.08.2015 declaring total income of Rs.29,81,150/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-7(4), Pune (‘the Assessing Officer’) vide order dated 22.12.2017 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.87,59,280/-. While doing so, the Assessing Officer disallowed the loss on derivative transaction relating to the commodity on National Spot Exchange Ltd.. The factual background of the case is as under : The appellant was engaged in trading and investing in shares of commodities on National Spot Exchange Ltd. through one broker, namely, Sujash Enterprises Private Limited. However, the payment due from the said exchange on account of difference between the purchase and sale price of Rs.61,76,980/-. Out of which a sum of Rs.3,76,035/- was received and according to the assessee, balance amount had become irrecoverable, was written off in the books of account and the same was claimed as business loss, which was disallowed by the Assessing Officer by holding that the same cannot be allowed as bad debt as the provisions of section 36(2)(vii) had not stood satisfied.