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2018 (1) TMI 1520 - AT - Income TaxDisallowance towards set off of fictitious losses - Addition towards unexplained expenditure - survey proceedings u/s 133A - HELD THAT:- No spot verification u/s 131(1A) of the Act was carried out against the assessee and the addition was made merely on the basis general information. A search action u/s 132 of the Act was carried out in commodity market group of cases on 19/06/2007, wherein, as per the Revenue, some data pertaining to trade modification and client code changes of the brokers was collected. Subsequently, survey proceedings u/s 133A of the Act was conducted on 25/03/2008 at the business premises of the assessee. The assessee offered additional income of ₹ 33,22,000/-. The whole case of the Revenue is that the assessee made huge client code modification resulting into loss of ₹ 2,88,55,000/-. The case of the assessee is that all the transactions were made on recognized stock exchange, i.e. MCX, through authorized broker M/s Riddi Siddhi Bullions Ltd. and the assessee also furnished the code of contract note. CIT (Appeal) dully followed the decision of the Tribunal in the case of Income Tax Officer vs Pat Commodity Services Pvt. Ltd. [2015 (8) TMI 973 - ITAT MUMBAI] and Sambhava Investment Ltd. [2014 (1) TMI 84 - ITAT MUMBAI] and deleted the addition. The revenue authorities ignored the reply to question no.9, wherein, the partner of the assessee denied of having made any request for any change in client code. The assessee also paid a margin money of ₹ 2.90 crores to RSBL which is evident from the statement of account of RSBL which has been adjusted against the losses of the assessee. Undisputedly, the transactions have done through recognized exchange and no evidence has been brought on record to defy the transaction by any denial from exchange authorities. Thus, we find no infirmity in the conclusion drawn by the Commissioner of Income Tax (Appeal). Identical is the situation for deleting the addition towards unexplained expenditure. Resultantly, the appeal of the Revenue is dismissed.
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