Prompt Commodities Ltd Vs ITO (ITAT Kolkata)
No Evidence, No Enquiry, Only Suspicion: Kolkata ITAT Deletes Entire Derivative Loss Addition- F&O & Currency Loss Genuine: AO Cannot Rely on Invalid SEBI Order
Assessee, a registered broker & trader in securities/commodities, claimed BSE F&O loss of ₹5,01,71,829 & currency-derivative loss of ₹2,75,70,970 incurred through broker Goodluck Securities. AO treated both losses as bogus, relying solely on SEBI’s ex-parte interim order dated 20.08.2015, alleging manipulation in liquidity stock options, & added ₹7,84,46,800. CIT(A) confirmed.
Tribunal noted that the very SEBI order forming the basis of addition now stands vacated, with no binding force; the subsequent SEBI order relied on by DR pertained to NSEL & was irrelevant to BSE platform. Assessee had filed complete documentary evidence—contract notes, demat statements, margin payments, broker ledger—which remained unrebutted. Tribunal applied the detailed Mumbai ITAT ruling in Vinay Ramanlal Shah (29.05.2025), where identical allegations based on SEBI’s interim order were rejected, emphasising absence of incriminating material, no link with counterparties, screen-based trades with STT, & no proof of collusion. Holding that AO proceeded on mere suspicion, & that use of an external broker is not prohibited even for a registered broker, Tribunal deleted the entire addition & directed AO to allow the set-off.
