TMI Blog2013 (9) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee of that previous year – Decided against the Assessee. - Income Tax Appeal No.189 of 2012 - - - Dated:- 10-9-2013 - Rajive Bhalla And Dr. Bharat Bhushan Parsoon,JJ. For the Appellant : Mr. Pankaj Jain, Advocate For the Respondent : Ms. Savita Saxena, Advocate ORDER Rajive Bhalla, J. The appellant challenges order dated 09.3.2012 passed by the Income Tax Appellate Tribunal, A Bench, Chandigarh, setting aside order dated 23.4.2010 passed by the Commissioner of Income Tax (Appeals)-II, Ludhiana, and restoring order dated 31.12.2008 passed by the Assessing Officer. Counsel for the appellant submits that as the appellant disclosed an income of Rs.25,25,120/-, including Rs.11,19,765/-, as commodity income, the Assessing Officer as well as the Income Tax Appellate Tribunal have erred in holding that as this amount does not relate to income as defined under Section 14 of the Income Tax Act, 1961 (hereinafter referred to as the Act ), it has to be considered as income under section 68 of the Act. It is further argued that Rs.11,94,315/- shown as commodity income falls within the definition of income from other sources as defined under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the parties, perused orders passed by the Income Tax Appellate Tribunal, Commissioner of Income Tax (Appeals) and the Assessing Officer, but before proceeding to record our opinion on the arguments addressed, would narrate, in brief, the facts of the present controversy. The appellant filed a return of income. A sum of Rs.11,19,765/- was shown as commodity income received from M/s Shivam Commodities Services Limited. The Assessing Officer, provided an opportunity to the appellant to establish the bona fides of this transaction and after forming a prima facie opinion, the appellant has not been able to prove the bona fides of the transaction, the alleged income from commodities is without any plausible explanation etc. and called upon the appellant to explain the matter in detail. The appellant, in response, filed a reply and made an attempt to explain the income, but as the Assessing Officer was not satisfied, proceeded to hold as follows:- Undersigned has considered the contentions put forth by assessee and the same are rejected since assessee has not been able to prove the authenticity/genuineness of alleged profit/commodity income from trading of derivatives of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken the following grounds:- That the ld. CIT(A) has erred in not allowing deduction of loss of Rs.74,550/- form derivating trading of commodities against profit earned from the same source. As already stated earlier, the assessee has claimed deduction for a sum of Rs.74,550/- representing loss form derivating trading in commodities against the total profits amounting to Rs.11,94,315/-. The loss claimed by the assessee from derivating trading was disallowed by the AO, which, on appeal, has been confirmed by the CIT(A) with the following observations:- 7.41 While dealing with above mentioned grounds of appeal it has been held that the transactions of the appellant with the broker in respect of earning the income from trading in derivatives of commodity were genuine. For deciding as above most important fact which was considered was that the transactions resulted in income which has been accordingly disclosed in the return of income by the appellant. However, the transactions involved in this regard are those transactions where the appellant claimed loss of Rs.74,550/-. Therefore, for this the appellant was required to prove with necessary evidence that such loss was genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions 2(45)/4/5 of the I-T Act yet that does not mean that the income assessable under section 68 has to be assessed u/s 56. In the case before us, source of unexplained cash credits is not known and hence they cannot be linked to any known source/head of income including income from other sources. In order to constitute income from other sources , the source, namely, the other sources has to be identified. Income from unexplained or unknown sources cannot therefore be considered or taxed as income from other sources....... The learned Income Tax Appellate Tribunal, thereafter, reproduced a judgment of the Gujarat High Court in Faqir Mohammad Hasi Hassan v CIT 247 ITR 290 and proceeded to restore the order passed by the Assessing Officer. The five questions of law framed by counsel for the appellant may, in essence, be summarised as a single question of law, namely, whether commodities income declared by the appellant in his return can be considered as income from other sources under Section 14 or income under Section 68 of the Act. A due consideration of findings recorded by the Assessing Officer as well as the Income Tax Appellate Tribunal, leave no ambiguity that Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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