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2020 (9) TMI 1012 - AT - Income TaxLosses eligible to be carried forwarded and consequently for set off in subsequent years - Business or speculation loss - claimed on commodity and derivatives and share derivatives as speculation loss - HELD THAT:- Assessee’s activity/loss is covered in currency and futures and options, which have been carried out/claimed as per proviso/clause (d) to section 43(5) of the Act read with Explanation 1 thereto and the said Notification No. 2/2006 [ so 89( E ), dated 25-1-2006. AO erred in assessing/adding all the losses, which the assessee claimed on commodity and derivatives and share derivatives as speculation loss. Since the assessee’s case is covered in Explanation 1 to section 43(5)(d) of the Act and assessee’s transaction was an eligible transaction, it cannot be termed as ‘speculative transaction’. Since the Revenue has not challenged the finding of fact on this issue by the Ld. CIT(A) that the commodity have taken place through registered broker on the portal of the NSE through screen based trading system, the finding of fact crystalizes and therefore, as per law the action of Ld. CIT(A) is correct and we find no infirmity in the impugned order of the Ld. CIT(A) in allowing the same as business loss. Assessee has filed his return of income u/s. 139(4) belatedly because the assessee was an individual and his accounts need not be audited u/s. 44AB - AO misdirected himself and fell in error as rightly noted by the Ld. CIT(A). According to the threshold limit as per section 44AB of the Act in this assessment year was of ₹ 60 lakhs and as per section 44AB of the Act the law enforced for the AY 2012-13 the limit was of ₹ 60 lakhs and it was enhanced to ₹ 1 crore only for the AY 2013-14. After going through the details of derivatives chart, which is evident from P & L account, which show the total of favourable and unfavourable differences exceed ₹ 60 lakhs and therefore, the assessee was required to get his accounts audited u/s 44AB of the Act. Since the return of income was filed on 26-09-2016 claiming losses incurred during the year (AY under consideration), the assessee was eligible to carry forward his losses as business loss. We find no infirmity in the impugned order of the Ld. CIT(A) in adjudicating this issue. Therefore, this ground (no.1) of revenue’s appeal is dismissed. Unexplained cash credit u/s. 68 - unapproved creditworthiness of the loan creditor - CIT-A deleted addition - HELD THAT:- Assessee received ₹ 60 lakhs from Sh. G.R Poddar and the AO in the scrutiny proceedings u/s 143(3) of the Act has accepted the identity, creditworthiness and genuineness of the loan transaction with Shri G.R.Poddar. Since the AO himself has accepted the identity, creditworthiness and genuineness of the lender, who is the elder brother of the assessee, who has given loan in the AY 2013-14, it does not stand to logic why the loan for this AY should be disallowed when the very same elder brother/lender of the assessee has given the loan to the assessee. Therefore, the said loan cannot be suspected / doubted. We find no infirmity in the impugned order of the Ld. CIT(A) and therefore, we dismiss this ground no.2 of the revenue’s appeal. Short term capital loss - disallowance as assessee did not produce any details or contract regarding this issue and has failed to prove the nature of transaction - HELD THAT:- CIT(A) has found that all the transactions were carried out through the registered broker electronically on the portal of the NSE through Screen Based Trading System and supported by time stamped contract notes. As brought to the notice of CIT(A) that the deliveries have been effected through depository accounts and the payment was through banking channels and, therefore, CIT(A) found that AO has simply disbelieved the claim even though the assessee had filed the complete details of Short term capital loss along with ledger of assessee in the books of broker. Taking note of the contract notes, the Ld. CIT(A) found that assessee carried out short-term transaction therefore, he directed to allow the claim of the assessee on this ground. We find no infirmity in the action of Ld CIT(A) on this issue. - Decided against revenue.
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