TMI Blog2019 (3) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 - Sri J. Sudhakar Reddy, Accountant Member And Sri S. S. Viswanethra Ravi, Judicial Member For The Appellant : Shri Robin Choudhury, Addl. CIT-DR For The Respondent : Shri Manish Tiwari, AR ORDER Per J . Sudhakar Reddy :- This is an appeal is filed by the Revenue and is directed against the order of the ld. Commissioner of Income Tax (Appeals) - 2, Kolkata (hereinafter the ld. CIT (A) ), passed u/s 250 of the Income Tax Act, 1961 (the Act ), dated 05/05/2017. 2. Brief fact of this case are that the assessee is a company and is a SEBI registered stock broker. The assessee company has membership of the National Stock Exchange of India (NSE), Bombay Stock Exchange Ltd. (BSE) and MCX Stock Exchange (MCX-SX). This company is mainly engaged in the business of dealing in shares and securities. It filed return of income on 29.09.2014 declaring total income of ₹ 3,12,23,356/-. The Assessing Officer competed assessment u/s 143(3) on 28.12.2016 determining the total income of the assessee at ₹ 6,52,94,158/-, inter alia disallowing, trading loss arising out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. First Appellate Authority considered all the submissions of the assessee and granted relief to the assessee by holding that the Assessing Officer was wrong in coming to a conclusion that this claim of loss by the assessee is not genuine. 4. Aggrieved the Revenue is in appeal before us on the following grounds: 1. Whether on the facts and in the circumstances of the case, the ld. CIT(A) erred in considering disallowance of the losses of ₹ 3,37,70,302/- claimed by the assessee company in dealing in shares of five companies on the basis of judicial decisions differing with the issue involved. 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) erred to consider the detailed Investigation report submitted by the DIT(Investigation), Kolkata ignoring the fact that SEBI has suspended operation of company share in which the assessee has allegedly transacted and whether such ignorance of fact pointed out by competent authorities like SEBI, is perverse or not? 3. That the appellant craves for leave to add, delete amend or modify any ground before or at the time of appellate proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based online trading system of the recognized Stock Exchange, i.e. Bombay Stock Exchange Ltd. (BSE). 2. All the shares purchased were credited/transferred by the Stock Exchange to appellant s demat account within the prescribed settlement period of the Stock Exchange. 3. Similarly entire sale of these shares were debited by the Stock Exchange from demat account within the prescribed settlement period of the Stock Exchange. 4. These demat accounts are maintained under the relevant provisions contained in the Depository Act, 1996. 5. The copy of the entire demat account for the relevant year were filcd and the AO has not pointed out any discrepancy in such demat account. (PB, page- 199 to 224 322 to 323) 6. There is no offline transaction by the appellant. There is no transaction in the nature of bonus/preferential allotment/private placement etc. Even the AO has not doubted that the transactions were not through online trading system. 7 The appellant during the relevant Assessment Year 2014-15, has traded in more than 672 scripts listed in the SEBI recognized stock exchanges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uration and days for all the shares purchased and sold is enclosed. (PB-Page-97 to 198) 12. As regards to payment for purchase and sale of shares, under the online trading system of the Stock Exchanges, all the settlement of trades are carried out by the Clearing Corporation of the Stock Exchanges set up in pursuant to the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 by virtue of which the Clearing Corporation acts as a central counterparty between the buyer and the seller and guarantees contractual performance by becoming buyer to every seller and seller to every buyer. In case of Bombay Stock Exchange Ltd. (BSE), Indian Clearing Corporation Ltd. (ICCL) acts as clearing corporation. Furthermore as per SEBI guideline, the appellant is required to operate a separate Settlement Bank Account specifically for the clearing and settlement of trades executed on a Stock Exchange. Payments for all purchases are made to the ICCL through the Settlement Bank Account of the Company. Similarly receipts against all sale of shares are received from ICCL in the Settlement Bank Account of the Company. No part of payment for purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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