TMI Blog2015 (6) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... physical delivery. Assessee also produced the records along with challans (delivery note) which clearly shows that the gold was traded. Even the ld. Assessing Officer did not point out any defects in the challans, therefore, the conclusion of the ld. Assessing Officer that there was no physical transaction is without any basis. It is also noted that the assessee paid VAT on the turnover, which is applicable to delivery based trading. The totality of facts clearly indicates that the assessee in fact transacted in gold and bullions in the normal course of business to earn profit. No prudent businessman will intentionally incur losses. Even otherwise, all the payments are through banking channel; therefore, we find no infirmity in the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. During hearing of this appeal, ld. DR, Shri Vijay Kumar Bora, advanced his arguments which are identical to the ground raised. On the other hand, Shri Amar Gahlot along with S. Sriram, ld. counsel for the assessee, defended the conclusion arrived at in the impugned order. 2.1. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion we are reproducing hereunder the relevant portion from the conclusion drawn in the impugned order for ready reference and analysis:- 4. I have considered the facts of the case and and submissions of the assessee. The A.O. has finally held that the loss incurred by the assessee in trading of gold and bullion is a speculative loss, though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y item and then sold the same and at both times physical delivery is taken and given then it will not be a speculative trading irrespective of the fact whether the stock register is maintained or not. The A.O. has disputed the intention of the company and held that company wanted to incur losses but in this regard it is relevant to mention that in the earlier year similar transactions were held a normal trading activity, though for a smaller amount. In the year under consideration there is no evidence or fact on record which can prove that the intention of the assessee was to incur losses. A.O. has merely based her decision on the fact that assessee had earned profit in another line of business and, therefore, it wanted to set off the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gest that there was no physical delivery. On the contrary assessee has produced challans (delivery note) and the concerned parties before the A.O. which proves that the deliveries had actually taken place. Assessee has also paid a higher VAT @ 1% of the turnover which is applicable to delivery based trading, whereas, 0.25% VAT is applicable to non-delivery based transactions. Even the transactions of purchase and sale are with different parties, whereas, the transactions of purchase and sale need to be with the same party for a speculative transaction. Therefore, in view of the above discussion it is clear that the assessee genuinely transacted in gold and bullion in the normal course of business with the intention to earn profit and to ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, the gold purchase was shown have been sold on the same day. 3. On majority of days, the gold purchase and sold was ranging between 20 to 30 Kgs. 4. The assessee consistently incurred loss in all transactions for sale of gold. 2.3. The assessee was asked to submit time-wise details of purchase and sale of gold and also the evidence with regard to rate at which the gold was sold. The assessee vide communication dated 01/11/2010 claimed that the type of transaction is not available on record as the dealer did not include the time in the invoice and further all the purchases and sales are by way of cheques and also the gold was transported physically to the dealer by the staff members of the assessee firm. The ld. Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no actual delivery and no stock register was maintained. The assessee filed the copy of the ledger account during assessment proceedings as well as before the ld. Commissioner of Income Tax (Appeals), which gives the complete details of stock available with the assessee. In any case, the nature of trading activity whether speculative are normal is not in dispute. We note that if a person purchases any item and then sold the same in both situations, there is a physical delivery is taken and given. It is also noted that the parties from whom the dealing in gold was made like Shri Rakesh Patel of Jorss Bullions, Pushpak Bullions and R.S. Bullions were produced before the Assessing Officer, who accepted the transactions as has been discus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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