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2016 (11) TMI 388 - AT - Income TaxAddition income u/s 68 - whether speculation profit was to be brought to tax in the assessee’s hands as income from undisclosed sources? - Held that:- CIT(A), on examination of the details thereof, observed that the assessee had not recorded any of the these transactions in his books of accounts; had not made any deposit with the sub-broker and not paid security transaction tax, had not got his accounts audited even though the turnover in this ‘speculation’ business activity was in excess of ₹ 40,00,000/- as required under section 44AB of the Act. CIT(A) further observed that the sub-broker M/s. Falgun Finvest, with whom the assessee entered into these alleged speculative transactions, admitted that it was engaged in the business of giving havala entries for a fee and concluded that in view of the facts on record, it is clear that the assessee laundered his undisclosed income through this sub-broker M/s. Falgun Finvest as speculation profit/income in shares. That Shri Niraj Sanghvi, husband and POA holder of his wife Smt. Charu Sanghvi, Prop. Falgun Finvest admitted to the same We find that the learned CIT(A) observed that M/s. Falgun Finvest in letter dated 13.12.2010 has confirmed that it had issued bills to the assessee in respect of certain transactions that took place in Financial year 2002-03 done “off market” and not routed through the main broker, M/s. Ventura Securities Ltd. In this factual matrix of the case, finding that assessee has not been able to bring on record any material evidence to controvert the finding of the learned CIT(A), we uphold the action of the learned CIT(A) in bringing to tax in the assessee’s hands, the undisclosed income as income from other sources, since the facts on record clearly establish that the assessee had not earned any speculation income but had merely laundered his undisclosed income for speculation profits by entering into dubious transactions in order to avail set off against brought forward unabsorbed speculation loss - Decided against assessee
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