Case Law Details
Dhaval R Ajmera Vs ITO (ITAT Mumbai)
Though the assessee has raised several grounds, the only effective issue involved in the impugned appeal is as to whether the ld. CIT(A) was justified in confirming the disallowance of Rs.7,89,745/- on account of alleged purchase of shares through M/s. Alliance Intermediates and Network Private Limited and alleged related commission expenditure of Rs.39,487/- in the facts and circumstances of the instant case.
We also find from the computation of income of the assessee and the details of purchase and shares made through other two registered share brokers i.e. Alankit Assignments Ltd., and RBK Share Broking, which are enclosed in pages 16 & 17 of the paper book, the assessee had not made any purchase of shares to the tune of Rs.7,89,745/- through Alliance Intermediates and Network Pvt. Ltd., From the documents available on record, it is very clear that purchase and sale of share transactions were carried out by the assessee through the registered brokers i.e. Alankit Assignments and RBK Share Broking and Speculative transactions were carried out through the registered broker i.e. Alliance Intermediates and Network Pvt. Ltd. The assessee had incurred short term capital loss and earned long term capital gains in respect of purchase and sale of shares carried out through Alankit Assignments and RBK share broking which has been duly disclosed in the return of income. We find that the assessee had only incurred speculation loss of Rs.33,83,516/- in respect of future and option transactions carried out through Alliance Intermediates and Network Pvt. Ltd during the year and this loss has not been set off with any speculation profit either during the year or in any subsequent assessment years. This factual aspect has been ignored by the lower authorities in the instant case and the addition has been merely made based on information received from a third party and ignoring the documents placed on record.
We also find that in the case of Ms. Kokila S. Ajmera vs. DCIT in ITA No.2959/Mum/2017 for A.Y.2007-08, this Tribunal under same set of facts had categorically held that the speculation loss incurred by those individuals (who are relatives of this assessee before us) had not claimed set off of the same with future speculation income. Even if the speculation loss incurred by the assessee is treated as non-genuine, the same would be of no consequence so far as the determination of tax liability of the assessee in the instant case as well as in the subsequent years is concerned.
In view of the aforesaid observations, we hold that the entire disallowance of Rs.7,89,745/- has been made on complete incorrect assumption of facts and on mistaken premise. We categorically hold that there is no purchase of shares of Rs.7,89,745/- made by the assessee through Alliance Intermediates and Network Pvt. Ltd which was claimed as deduction in return of income. Hence, there is absolutely no question on making any disallowance of Rs.7,89,745/- on account of purchase of shares in the assessment. Hence, the same is hereby directed to be deleted. Once the disallowance made on account of purchase of shares is deleted, the alleged related commission expenditure u/s.69C of the Act in the sum of Rs.39,487/- also automatically gets deleted. We direct accordingly. Hence, the grounds raised by the assessee are allowed.
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