TMI Blog2017 (11) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, uphold the impugned order of the ld. CIT(Appeals) on this issue and dismiss Ground No. 1 of the assessee’s appeal. Claim for short-term capital loss - Held that:- As observed that the shares were purchased by the assessee at ₹ 10/- per share on 01.11.2012 and there is nothing brought on record by the Assessing Officer to show that the fair market value of the said shares as on the date of purchase by the assessee was different from the purchase price shown by the assessee. As regards the allegation of the Assessing Officer that there was no monetary involvement in the transactions in question, the assessee has placed on record the copies of current accounts of the concerned family members as appearing in the books of account of the assessee at page nos. 27 & 28 of his paper book to show that there were substantial monetary transactions between the parties against which the value of share transactions in question was adjusted. Having regard to all these facts of the case, I am of the view that the action of the Assessing Officer in disallowing the short-term capital as claimed by the assessee by doubting the genuineness of the relevant share transaction was not wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement and the Assessing Officer accordingly did not accept the claim of the assessee for speculation profit as genuine. He treated the said profit as unexplained cash credit under section 68 chargeable to tax in the hands of the assessee @ 30% as per the provisions of section 115BBE of the Act. 4. The action of the Assessing Officer in treating the speculation profit as unexplained cash credit under section 68 chargeable to tax @ 30% was challenged by the assessee in the appeal filed before the ld. CIT(Appeals) and the following submissions were made by the assessee in support of its case on this issue before the ld. CIT(Appeals):- 1. The appellant earned speculation profit of ₹ 3,00,805.26 and the same was shown as income during the year on accrual basis. 2. The amount was not received during the financial year. It was received by cheque on or about 24.07.2013 as per bank statement [copy enclosed}. Thus, the credit in the bank appears in next financial year 2013-14 and therefore could not be considered in the Assessment Year 2013-14. 3. Thus, there has been no receipt during the financial year 2012-13 which could be hit by provisions of Sec 68. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeded to uphold the action of the Assessing Officer in treating the speculation profit as unexplained cash credit under section 68 for the following reasons given in paragraph no. 5 of his impugned order:- 5. Having considered the matter, and the specific findings of the Ld. AO, it has to be said there remains suspicions about the Impugned transactions entered into by the appellant, leading to purported speculation profits. The letter of the National Multi Commodity Exchange of India Ltd. (NMCE) cannot be brushes aside by the appellant on grounds that he had nothing to do with what the status of the Broker was on the Exchange. This coupled with the fact that there was no response to the notice Issued by the ld. AO to the Broker assumes greater significance. I am in agreement with the Ld. AO that the transactions relating to the claim of speculation profits as made by the appellant come within the ambit of suspicious transactions , and therefore the rules of, suspicious transactions would apply to the case. Payment through Banks, performance through stock exchange and other such features are only apparent features. I this case what the Stock Exchange has confirmed before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be drawn that the winning tickets were purchased by the appellant after the event. The majority opinion after considering surrounding circumstances and applying the test of human probabilities had rightly concluded that the appellant's claim about the amount being her winning from races, was not genuine. It could not be said that the explanation offered by the appellant in respect of the said amounts had been rejected unreasonably and that the finding that the said amounts were income of the appellant from other sources was not based on evidence . Order of the AO on this technical plea will amount to taking a lopsided view of the proceedings. Besides, the JPC has underlined the importance of Reports of investigation agencies like CBI, DRI, ED whose were in the offing, as the relevant investigations were in process. In view of these observations, we do not accede to the assessee's pleas In this behalf. The Assessee's contentions and objections in this behalf that the material available on record was not admissible as evidence and that it cannot be relied on by the AO, are devoid of any merit and are rejected outright ....... . In view of the above discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from M/s. NMCE was sufficient to show that the claim of the assessee of speculative profit was not genuine and the authorities below, therefore, were fully justified in treating the same as unexplained cash credit under section 68. As regards the case laws relied upon by the ld. counsel for the assessee in support of the assessee s case, he contended that the facts involved in the said cases are altogether different since there was no such specific adverse information received against the assessee from the concerned Exchange. 8. I have considered the rival submissions and also perused the relevant material available on record. It is observed that in order to verify the veracity of the claim of the assessee of having earned speculation profit, enquiry was made by the Assessing Officer with the concerned broker, namely M/s. Jagtarni Commodities Pvt. Limited as well as the concerned Commodity Exchange NMCE by issuing notices under section 133(6) of the Act. In reply to the said notices, there was no response from the broker. NMCE, however, reported to the Assessing Officer vide letter dated 29.12.2015 that neither the assessee nor even the broker was ever active on their Exchange. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount as unexplained cash credit under section 68 chargeable to tax at the flat rate of 30%. I, therefore, uphold the impugned order of the ld. CIT(Appeals) on this issue and dismiss Ground No. 1 of the assessee s appeal. 9. The issue raised in Ground No. 2 relates to the disallowance of ₹ 1,00,000/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of assessee s claim for short-term capital loss. 10. In the return of income filed for the year under consideration, a short-term capital gain of ₹ 1,12,118/- was declared by the assessee and the same was set off against a short-term capital loss of ₹ 1,00,000/- arising from the sale of shares. During the course of assessment proceedings, the claim of the assessee for short-term capital loss of ₹ 1,00,000/- arising from the sale of 25,000 shares of M/s. Paul Chakraborty Pvt. Limited was examined by the Assessing Officer and on such examination, he recorded the following findings:- (i) It is apparent from the details submitted during the course of assessment proceedings that the assessee-HUF allegedly purchased shares from Bimla Devi Jain, who is a member of the HUF and pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter. 2. In the said circumstances, I am not inclined to interfere with the findings of the Ld. AO, which accordingly stand confirmed. The ground is adjudicated against the appellant, and stands dismissed . 13. The ld. counsel for the assessee submitted that the genuineness of the relevant transactions of purchase and sale of shares resulting into short-term capital loss was never doubted by the Assessing Officer and the claim of the assessee for the short-term capital loss was disallowed by him merely because the said transactions were made with the family members. He contended that there is no bar in having such transaction along with the family members and the other transactions of similar nature made by the assessee with family members through journal entries were accepted by the Assessing Officer himself as genuine. He submitted that recurring current account is maintained by the assessee to post such transactions in shares made by the assessee with family members and this is the regular practice followed by the assessee. 14. The ld. D.R., on the other hand, relied on the orders of the authorities below in support of the revenue s case on this issue. 15. I ha ..... 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