HIGH COURT OF GUJARAT
CIT v. Jay Enterprise
Tax Appeal No. 45 of 2011
Date of Pronouncement- March 20, 2012
Bhaskar Bhattacharya, Actg. CJ.
This Appeal under Section 260A of the Income Tax Act is at the instance of the Revenue and is directed against the order dated 14th July 2010 passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot in I.T.A. No.519/RJT/2008, by which the Tribunal dismissed the appeal preferred by the Revenue.
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The following three questions arise for consideration before us:
1. Whether the Tribunal below committed substantial error of law in confirming the order of the Appellate Commissioner deleting addition of Rs.2 lac made by the Assessing Officer on account of non-production of books of accounts.
2. Whether the Tribunal below committed substantial error of law in confirming the order of the Appellate Commissioner deleting disallowance of speculation loss of Rs. 16,78,416=00 made by the Assessing Officer.
3. Whether the Tribunal below committed substantial error of law in confirming the order of the Appellate Commissioner deleting addition of Rs. 8 lac made by the Assessing Officer under Section 68 of the Act as unexplained cash credit.
As regards the first point advanced by the Revenue, we find that during original assessment proceedings the Assessing Officer himself had accepted the position that the assessee had maintained quantitative details and that the general profit was on the higher side. We further find that in remand report also, the Assessing Officer could not justify the lump-sum addition other than making a short statement that addition was justified on books, vouchers, etc. as produced before him.
In such circumstances, both the Commissioner of Income Tax (Appeals) and the Tribunal below deleted the lump-sum addition in the absence of any basis on the part of the Assessing Officer and even after holding that competitive details were maintained and the general profit was favourable.
In such circumstances, we are of the opinion that the Tribunal below rightly refused to interfere with the finding recorded by the Commissioner of Income Tax (Appeals) which is based on appreciation of evidence on record.
As regards the second ground, it appears that the Assessing Officer did not deny the fact that the assessee is a bullion merchant and has a terminal of MCX as a member. It also appears from the record that the loss arose on account of dealing in commodities ordinarily dealt in by the assessee in its business. In such circumstances, we find that both the Commissioner of Income Tax (Appeals) and the Tribunal below held that these transactions were of an integrated nature and were entered into to guard against future losses and, therefore, came within the exception to Section 43(5) of the Act.
In such circumstances, we find that the Tribunal below was quite justified in upholding the finding recorded by the Commissioner of Income Tax (Appeals) that the loss could not be said to be a speculation loss. We find that no substantial question of law is involved on the above question.
On the last question mentioned above, it appears from the remand report of the Assessing Officer that in respect of addition of Rs. 5 lac from two of the parties concerned, the Assessing Officer received direct confirmations in response to inquiries under Section 133(6) of the Act. It further appears from the record that both the parties are borne on the departmental tax record and have filed return of income and both the parties have filed their return, bank statement and balance sheet, and in those, the loans to the assessee are reflected. In such circumstances, we find that the Tribunal below rightly affirmed the finding recorded by the Commissioner of Income Tax (Appeals) that the assessee had discharged its burden under Section 68 of the Act as the cash credits were treated to be explained.
Thus, we do not find any reason to interfere with such concurrent finding of fact recorded by both the Commissioner of Income Tax (Appeals) and the Tribunal below.
Thus, no substantial question of law being involved, we summarily dismiss this Appeal.