TMI Blog2015 (1) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessing officer while including a sum of ₹ 66,35,210/- would show that the no rationale has been given as to whether in fact consideration flowed for the intraday purchases and sales effected by the assessee so as to take it out of the mischief. Thus the matter should be considered afresh and express findings recorded as to whether in fact intraday purchases and sales made by the assessee were jobbing transactions and whether consideration has passed. - Decided in favour of assessee for statistical purposes. Interest-free loans secured by the assessee - addition under Section 68 - Held that:- All the seven creditors of the assessee had confirmed the transactions. Their creditworthiness was established in the sense that rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as such? (ii) Whether the interest-free loans secured by the assessee to the tune of ₹ 1.55 crores were in the circumstances of the case liable to be added under Section 68 of the Act? 2. The assessee engages itself in trading in stocks and shares and acts as a sub-broker. It had claimed a sum of ₹ 66,35,210/- on account of clearing difference. In the assessment year 2007-08 it also reflected an amount of ₹ 1.55 crores as loans/advance obtained from various parties and entities. The assessing officer proceeded to treat the first amount i.e. ₹ 66.35 lakhs as a speculative loss and disallowed it on account of Section 73(1). As far as the sum of ₹ 1.55 crores was concerned the assessing officer added it ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23; trading of securities, the transactions are automatically recorded by the stock exchanges and there is no requirement of physical delivery of said certificates etc. The purchase and sale is routed through demat accounts and the only way to find out the profit and loss on the purchase and sales of securities made through a broker is the account statement submitted by such broker from time to time. In the present case, the appellant has maintained all the regular books of accounts and all necessary details have been filed before the AO in the course of assessment proceedings. Therefore, in my view, the AO was not justified in holding the loss of ₹ 66.35 lacs as speculative in nature. Accordingly, he is directed to treat the loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served. 6. So far as the second question i.e. addition under Section 68 is concerned this Court notices and both the CIT and ITAT examined the question in detail. All the seven creditors of the assessee had confirmed the transactions. Their creditworthiness was established in the sense that relevant documents in support of their possessing and requisite funds to advance loans to the assessee were examined. It was also noticed that this amount was represented by the assessee to the said creditors. In the circumstances, the appropriate course if the assessing officer felt that being interest-free, certain amounts were deemed to be included as income-was to do so in accordance with law rather than proceeding under Section 68 as he did. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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