TMI Blog2022 (7) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. AR, we are of the view that the Ld. AO has wrongly treated the open outstanding contracts as closing / opening stocks of the assessee and made re-working of profit. Therefore, the addition made by Ld. AO is not correct and deserves to be deleted. Accordingly, we accept the ground of assessee and delete the addition. - Decided in favour of assessee. - ITA No.554/Ahd/2019 - - - Dated:- 2-6-2022 - MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER Assessee by Shri B.T. Thakkar, AR Revenue by Shri R.P. Makwana, Sr. DR ORDER Per B.M. Biyani, A.M.: 1. This appeal filed by the assessee is directed against the order dated 29.01.2019 of learned Commissioner of Income-Tax (Appeals)-2, Vadodara [ Ld. CIT(A) ]in Appeal No. CIT(A)-2/10322/2017-18, which in turn arises out of the order of assessment dated 15.12.2017 passed by the learned ITO, Ward-41(1)(1), Nadia [ Ld. AO ] u/s 143(3) of the Income-tax Act, 1961 [ the Act ] for the Assessment-Year 2015-16. 2. The assessee has raised following ground: (1) The Commissioner of Income-tax has erred on facts and law, in confirming addition of Rs. 8,12,571/-. The same being unj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration. Although the assessee submitted to the Ld. AO that the differences are on account of outstanding open contracts of F O yet the Ld. AO treated the differences as closing / opening stocks of the assessee. The Ld. AO, therefore, made re-working of purchase, sales, cost and profit of the F O transactions and thereby computed an additional income of Rs. 8,12,571/- made addition to that extent. The detailed working are given in the assessment-order, which are not being reproduced for the sake of brevity. 5. Being aggrieved by the aforesaid addition of Rs. 8,12,571/-, the assessee went in appeal before Ld. CIT(A). During appellate-proceeding before Ld. CIT(A), the assessee made following submissions, as mentioned by Ld. CIT(A) in his order: 3.2 During the appellate proceeding before me, the appellant made written submission which is reproduced as under: With respect to the order passed by the Ld. AO for the A.Y. 2015- 16 the AO has calculated the Closing Stock of the open positions of the Futures and Options of Rs.24,14,212.50 and concluded the profit of Rs.14,29,972.50. Our argument against this is as under: The assessee is havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai, Tribunal, CIT vs. Edelweiss Capital Ltd. Mumbai where anticipated loss has been allowed but not anticipated gain to be estimated. But I hardly find this decision applicable here because assessing officer has determined profit based on the trading value. Trading data has been obtained from NSE, a third party whereas assessee challenges the profit based on own brokers trading data -Max Stock Broker Pvt. Ltd. Obviously, NSE data are more reliable than a private broking firm. 3.3.2 Another argument is that the Assessing Officer has considered trading business. Again I find this argument is factually incorrect. Detailed working at para 2 to 7 of assessment order clearly shows market to margin balance that has been considered to arrive profit/gain earned in appellant s business of grading. AR has failed to controvert the findings of the Assessing Officer with factual justification. Therefore, I don t need to interfere with the order passed by the Assessing Officer. Addition in this count is hereby upheld. This ground is dismissed. 7. Before us, the Ld. AR opened his argument by explaining the methodology and treatment of F O transactions. The Ld. AR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Grasim 30Apr15 Purchased on 20/03/2015 - 125 @ 3609.91 for Rs. 4,51,238.75 The Ld. AR submitted that these illustrative transactions would suffice to explain the facts. According to the Ld. AR, the first transaction demonstrates that there was an open outstanding transaction of 50 Nos. of NIFTY 23Apr2014 as on 01.04.2014 as explained by the assessee to the Ld. AO during the assessment-proceeding, but the Ld. AO has not accepted the submission of assessee. The Ld. AR submitted that the other transactions indicate that the purchase / sale transactions were done on 16/03/2015, 27/03/2015, 31/03/2015 i.e. in the previous year 2014-15 relevant to the assessment-year 2015-16 under consideration but their expiry dates were 30 Apr, 2015, which indicates that the transactions stood as open outstanding contracts on 31.03.2015 i.e. the end of the previous year 2014-15 relevant to the assessment year 2015-16 under consideration. The Ld. AR submitted that these and similar other transactions have been wrongly coined as opening stock or closing stock by Ld. AO. According to Ld. AR, there is nothing like opening stock or closing stock in F O transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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