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SANJAY KUMAR BUCHA Versus INCOME TAX OFFICER

2015 (5) TMI 270 - GUJARAT HIGH COURT

Actual loss incurred in F & O transaction - Tribunal confirmed the addition to the extent of ₹ 14,19,919/- (Rs.12,31,169.88 + ₹ 1,88,750/-) as income of the assessee in respect of the unaccounted bank account in question - Tribunal making addition of peak credit and also gross profit on cash deposit in bank account? - Held that:- It cannot be said that there is any error committed by the learned Tribunal, which calls for the interference of this Court. Now so far as the contention on .....

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ss. Under the circumstances, for the reasons assigned by the learned CIT(A) with respect to the claim of the assessee with respect to the alleged loss of ₹ 56,99,495/- reproduced hereinabove, we see no reason to interfere with the same. No substantial question of law - Decided against assessee. - TAX APPEAL NO. 256 of 2015 - Dated:- 20-4-2015 - MR. M.R. SHAH, J. FOR THE APPELLANT : MR KETAN H SHAH, ADVOCATE JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissat .....

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as discharged the onus regarding the actual loss incurred in F & O transaction worth ₹ 56,99,495/-? (B) Whether on the facts and in the circumstances of the case the learned Tribunal was right in law in making addition of peak credit and also gross profit on cash deposit in bank account? (C) Whether on the facts and in the circumstances of the case the learned Tribunal was right in law in not appreciating the facts that this is a case of only gross profit addition of ₹ 1,88,750/- .....

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or the Assessment Year 2008-09 declaring the total income at ₹ 2,95,019/-. The case was process under Section 143(1) of the Income Tax Act (hereinafter referred to as the Act ) and subsequently the case was selected for scrutiny and notice under Section 143(2) of the Act was issued on 28/08/2009. During the course of the assessment and on the basis of the AIR information it was found that the assessee was holding a bank account with Prime Co-operative Bank Ltd, Main Branch, Khatodra, Surat .....

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and was asked to show cause as to how the cash deposit of ₹ 37,75,000/- should not be added to the assessee total income as unexplained money under Section 69A of the Act. In response to the show cause notice, the assessee submitted his reply. The Assessing Officer was not satisfied and / or convinced by the explanation furnished by the assessee with respect to the cash deposit of ₹ 37,75,000/- deposited in the unaccounted bank account and, therefore, the Assessing Officer made the a .....

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unt. The assessee also furnished relevant proof in support of the loss incurred by him. The learned CIT(A) dismissed the said appeal sustaining the addition of ₹ 37,75,000/- to the income of the assessee under Section 69A of the Act. The learned CIT(A) did not agree with the submission on behalf of the assessee with respect to the alleged claim of loss amounting to ₹ 56,99,495/-. [2.3] Feeling aggrieved and dissatisfied with the order passed by the learned CIT(A), the assessee prefer .....

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eved and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the assessee has preferred the present Tax Appeal with the aforesaid proposed substantial questions of law. [3.0] Shri Ketan Shah, learned advocate appearing on behalf of the assessee has vehemently submitted that the learned Tribunal has materially erred in confirming the order passed by the learned CIT(A) with respect to the claim of the assessee with respect to loss of ₹ 56,99,495/-. It is further .....

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as well as the profit at the rate of 5%. [3.1] It is submitted that even otherwise since the the addition made at ₹ 14,19,919/- is against the loss incurred and, therefore, there is no justification in making the addition of ₹ 14,19,919/-. [3.2] Shri Shah, learned advocate appearing on behalf of the appellant-assessee has relied upon the decision of the Hon ble Supreme Court as well as the decisions of various High Courts in support of his submission that it is not open to the revenu .....

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utset, it is required to be noted that during the course of the assessment the Assessing Officer found that the assessee was having unaccounted bank account with one Prime Co-operative Bank Ltd., Surat and had deposited cash totaling to ₹ 37,75,000/- on various dates and, therefore, the assessee was called upon to show cause as to why the cash deposit of ₹ 37,75,000/- should not be added to the total income as unexplained money under Section 69A of the Act. The assessee submitted the .....

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of ₹ 56,99,495/- arising out of the said bank account wherein cash was deposited. The same came to be negatived by the learned CIT(A) in detail by observing as under; The submissions of appellant and reasons advanced by A.O. in the assessment order has been considered. It is seen that appellant has miserably failed in pointing out any defect in the action of A.O. whereby he has added a sum of ₹ 37,75,000/- u/s.69 of the I.T. Act. The assessee has stated that the cash deposit in bank .....

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held and ground No.II is dismissed. Ground No.III is interlinked with Ground No.II, wherein the appellant has alleged that A.O. followed pick and choose method and focused only on unexplained cash deposit. The A.O., as alleged by appellant, did not consider the share transactions routed through this bank which resulted in net loss of ₹ 56,99,495/-. In this regard, appellant s submissions and A.O. s arguments have been considered. Considering the totality of facts and circumstances and the .....

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d original document of alleged share transactions. Merely filing photo copies and saying that it if for A.O. to disprove these papers does not amount to discharging the onus cast on the appellant. iv. Even if we consider the alleged share transactions, it appears that these are speculative transactions and thus speculation loss cannot be allowed to be set-off against other incomes and certainly not against income u/s.69 of the Act. v. The appellant has not even whispered as to how he has arrived .....

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s purchased to whom sold and what is the closing stock. In the absence of such basic documents, A.O. cannot be expected to fish out evidence from sea. In view of the above and the position of law in this regard, it is unequivocally held that A.O. was perfectly justified in ignoring the alleged claim of loss amounting to ₹ 56,99,495/-. Thus, ground No.III is dismissed. [4.1] However, on further appeal to the learned Tribunal considering the peak deposits in the unaccounted bank account of & .....

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the addition to the extent of ₹ 23,55,080.12. While holding so, the learned Tribunal in paragraph 14 has observed and held as under; 14. Further, we find that the copy of th statement of account of bank in question was filed by the assessee before us. A perusal of the same shows that deposit of ₹ 37,75 lakhs was not made in the said bank account at a time, but, the same amount represents the aggregate amount of deposit, which was made in the said bank account during previous year. A .....

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hat the peak deposits in the said bank was ₹ 12,31,169.88 on 17.01.2008. Further, the frequency of deposit and withdrawal indicates that the assessee was carrying on certain undisclosed deposits. Therefore, it would be reasonable to estimate the said business income, and also to treat the same as business income of the assessee. We, therefore, estimate the assessee s profit from such business at the rate of 5% of ₹ 37.75 lakhs, which comes to ₹ 1,88,750/-. Therefore, in our con .....

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ppellant and considering the reasoning given by the learned Tribunal, we are in complete agreement with the view taken by the learned Tribunal. It is required to be noted that the learned Tribunal has first considered the peak deposit for the unaccounted bank account and after noting that the frequency of the deposit and the withdrawal from the account indicates that the assessee was carrying on certain undisclosed deposits and, therefore, even considering the profit at the rate of 5% of ₹ .....

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