HIGH COURT OF GUJARAT
Jayesh Raichand Shah
Versus
Assistant Commissioner of Income-tax
Special Civil Application Nos. 6830 & 6861 Of 2012
Date of Pronouncement – October 22, 2012
ORDER
Akil Kureshi J.
Heard learned counsel for the respective parties for final disposal of the petitions. These petitions arise out of similar background involving the same assessee. We have heard these petitions together and propose to dispose them off by this common order.
2. The petitioner is common in both the petitions. He has challenged two separate notices issued by the Assessing Officer seeking to reopen the completed assessments for the assessment years 2007-08 and 2008-09 which assessments were framed after scrutiny. The petitioner is a proprietary concern and is engaged in the business of wholesale of gold and silver ornaments, labour job of gold and silver ornaments and trading in gold and hedging in metal on commodity exchange.
3. For the assessment year 2007-08, the petitioner had filed a return of income on 31-10-2007 declaring a total income of Rs. 1.92 crores (rounded off). Such return was taken in scrutiny assessment. The Assessing Officer framed the assessment under section 143(3) of the Income Tax Act, 1961 (‘the Act’, for short) on 24-12-2009 determining the total income at Rs. 1.95 crores (rounded off).
4. In the return that the petitioner had filed, he had claimed loss on hedging of metal in Multi Commodity Exchange (‘MCX’, for short) at Rs. 12.76 lakhs (rounded off). In the notes forming part of the accounts for the year under consideration, the assessee had stated as under:-
“During the year, the assessee has entered into transactions for trading in gold and silver futures on commodities exchange. The net amount payable/receivable based on contract notes and detailed bill reports, on account of buy and sells contracts during the year, shows a loss. Such loss shown is accounted as loss for the year, to the extent of bills upto year end, and is shown separately in trading account. We are informed that such contracts are settled otherwise than by delivery of respective commodity. Due to non-availability of information, an adjustment on account of open position, if any, is not made and it would be made at the time of settling of contracts. Such transactions have been shown by the assessee in the nature of hedging in metals.”
5. The accounts were supported by audit report as required under section 44AB of the Act. In such audit report, in the statement of particulars required to be furnished under Form 3CD, it was stated as under:-
