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TMI Blog2015 (9) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... egative. This is evident from the judgment of the Gujarat High Court in Fakir Mohmed Haji Hassam v. CIT (2000 (8) TMI 44 - GUJARAT High Court) distinguished by the Tribunal itself where it has been held that when income cannot be classified under any one of the heads of income under Section 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. Insofar as this case is concerned, admittedly the income has been treated as unexplained cash credit under Section 68 of the Act. Once it is so done for the purpose of set off or any other purpose, the said unexplained income cannot be treated as business income under any one of the head provided under Section 14 in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Sri Joby Jacob Pulickekudy, Sri Anil Gorge, Adv JUDGMENT Antony Dominic, J. This appeal is filed by the Revenue challenging the order passed by the Income Tax Appellate Tribunal, Cochin Bench, in ITA 654/13 concerning the assessment year 2010-2011. The only issue that was raised before us was in relation to the assessment of profit from commodity trading as cash credit under Section 68 of the Income Tax Act. The assessment order itself show that it was found from the Profit and Loss Account that a sum of ₹ 5,13,55,093/- was found credited in the books of accounts of the assessee as commodity trading profit allegedly received from M/S Vatika Merchants Private Limited. The said income was adjusted/set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit from commodity trading declared by the assessee was a sham or bogus transaction. We notice that the assessing officer has given the above said finding after making necessary enquiries with the Commodity exchange. Hence, we do not find any reason to interfere with his decision on this issue and accordingly hold that the claim of receipt of profit from commodity trading is a sham or bogus one. Further as per Sec.68 of the Act, it is the responsibility of the assessee to explain about the Nature and source of any sum found credited in the books of accounts. Hence we are of the view that the assessing officer has rightly assessed the same as cash credit u/s 68 of the Act. 2. After holding so, the Tribunal examined the illegality of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese set of facts, we are of the view that it may not be unreasonable to treat the loan receipts and profit from commodity trading assessed u/s 68 of the Act as the receipts from the business activity of the assessee. Accordingly, we are of the view that the assessee is entitled to claim set off of current year loss and also brought forward loss/unabsorbed depreciation against the same in accordance with the relevant provisions of the Act. 3. On that basis the Tribunal set aside the order of the First Appellate Authority and directed the Assessing Officer to allow the set off of current years business loss as well as brought forward losses/unabsorbed depreciation against the income assessed in accordance with the provisions of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. Insofar as this case is concerned, admittedly the income has been treated as unexplained cash credit under Section 68 of the Act. Once it is so done for the purpose of set off or any other purpose, the said unexplained income cannot be treated as business income under any one of the head provided under Section 14 in which case the question of set off does not arise. 7. Insofar as the Supreme Court judgment in Lakhmichand Baijnath v. Commissioner of Income Tax, West Bengal (1959) 35 ITR 416 relying on which the Calcutta High Court has rendered its judgment in Daulatram Rawat Mull v. CIT (64 ITR 593) is concerned, readi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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