TMI Blog2020 (9) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) is correct and we find no infirmity in the impugned order of the Ld. CIT(A) in allowing the same as business loss. Assessee has filed his return of income u/s. 139(4) belatedly because the assessee was an individual and his accounts need not be audited u/s. 44AB - AO misdirected himself and fell in error as rightly noted by the Ld. CIT(A). According to the threshold limit as per section 44AB of the Act in this assessment year was of ₹ 60 lakhs and as per section 44AB of the Act the law enforced for the AY 2012-13 the limit was of ₹ 60 lakhs and it was enhanced to ₹ 1 crore only for the AY 2013-14. After going through the details of derivatives chart, which is evident from P L account, which show the total of favourable and unfavourable differences exceed ₹ 60 lakhs and therefore, the assessee was required to get his accounts audited u/s 44AB of the Act. Since the return of income was filed on 26-09-2016 claiming losses incurred during the year (AY under consideration), the assessee was eligible to carry forward his losses as business loss. We find no infirmity in the impugned order of the Ld. CIT(A) in adjudicating this issue. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by the revenue are as under:- 1. That in the facts and circumstances of the case, Ld. CIT(A) has erred in holding that as the return was filed within due date, losses incurred during the year are eligible to be carried forward for set off in subsequent years. 2. That in the facts and circumstances of the case, Ld. CIT(A) has erred in deleting the addition of ₹ 1,88,75,000/- made by the AO on account of unexplained cash credit u/s. 68 of the Income Tax Act, 1961 without examining the creditworthiness of the loan creditor. 3. That in the facts and circumstances of the case, Ld. CIT(A) has erred in directing the AO to allow the Short Term Capital Loss of ₹ 5,70,328/-. 4. That in the facts and circumstances of the case, Ld. CIT(A) in violation of Rule 46A of the Income Tax Rules, 1962,accepted the arguments and fresh evidence in the form of paper book from the assessee without seeking any remand report from the Assessing Officer to give comments. 3. At the outset, it is noticed that there is delay by 51 days in filing the impugned appeal. After going through the petition for condonation of delay ( 51 days) we are of the opinion that there ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 139(4) of the Act on 26-09-2012 and claimed the loss to be carried forwarded of ₹ 53,03,486/- being business loss which was incurred on account of commodity trading. However, this claim of the assessee was not allowed by the AO on the ground that the assessee is an individual, and since he did not require to get his accounts audited u/s. 44AB of the Act, therefore, due date of filing of return was on 31-07-2012 and since the assessee had filed his return u/s. 139(4) of the Act on 26-09-2012 it was belated return and therefore, the loss claimed on commodity trading of ₹ 45,39,898 and loss on future trading totaling to ₹ 53,03,486/- was on account of speculation activity and, therefore, the loss cannot be allowed to be set off along with saving bank interest of ₹ 21,961/-. On appeal, the Ld. CIT(A) based on evidence, found that the assessee indulged in trading of derivatives through M/s. Suvridh Capital Markets Ltd and M/s. India Nivesh Securities Pvt. Ltd, and since both entities were registered brokers on the portal of the NSE (National Stock Exchange) and the transaction happened through Screen Based Trading System, he allowed the claim of assessee. This fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s activity/loss is covered in currency and futures and options, which have been carried out/claimed as per proviso/clause (d) to section 43(5) of the Act read with Explanation 1 thereto and the said Notification No. 2/2006 [ so 89( E ), dated 25-1-2006. In such circumstances, we are of the view that the AO erred in assessing/adding all the losses, which the assessee claimed on commodity and derivatives and share derivatives as speculation loss. We note that since the assessee s case is covered in Explanation 1 to section 43(5)(d) of the Act and assessee s transaction was an eligible transaction, it cannot be termed as speculative transaction . Since the Revenue has not challenged the finding of fact on this issue by the Ld. CIT(A) that the commodity have taken place through registered broker on the portal of the NSE through screen based trading system, the finding of fact crystalizes and therefore, as per law the action of Ld. CIT(A) is correct and we find no infirmity in the impugned order of the Ld. CIT(A) in allowing the same as business loss. 9. Coming to the contention of the AO that the assessee has filed his return of income u/s. 139(4) on 26-09-2012, belatedly because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee brought to the notice of AO that loan from Shri G.R Poddar (elder brother of assessee) was to the tune of ₹ 1, 88,75,000/- and other loan (₹ 5,00,000/-) was from his son, Sh. Harish Poddar, ₹ 2,00,000/- from his daughter, Mona Poddar and ₹ 2,40,000/- was from his wife, Smt. Santosh Devi Poddar. The AO asked the assessee/AR to produce the details of Shri G.R Poddar, elder brother of the assessee. According to the AO, during the assessment proceedings the assessee did not file any supporting documents, which could be verified. According to AO, even though the assessee has said that he received the said amount from his elder brother, Sh. G.R.Poddar, who is settled in Singapore, and he has given money/loan to the assessee for purchase of flat business, however, the assessee failed to show that he had utilized the said loan for purchase of flat. Therefore, the AO added an amount of ₹ 1,88,75,000/- u/s. 68 of the Act. 12. On appeal, the ld. CIT(A) noted that the assessee had taken the said loan from his elder brother, Shri G.R Poddar, who is settled/resided in Singapore and he maintains an NRE account with UCO Bank, Burra Bazar, Kolkata (A/c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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