DCIT Vs Santosh Promoters private Limited (ITAT Kolkata)
Summary: The appeal was preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-20, dated 05.12.2023 for Assessment Year 2012-13. The first dispute concerned deletion of an addition of ₹1,54,10,350/- made by the Assessing Officer on account of alleged bogus loss on current year derivatives.
The assessee was a broker with allotted client code No. CK-0477 for trading in currency derivatives at MCX Stock Exchange. The assessee had issued valid contract notes in respect of online trading and all transactions were accepted on the stock exchange platform. The transactions were conducted through banking channels. The Assessing Officer nevertheless treated the loss incurred by the assessee as bogus loss.
The CIT(A) deleted the addition after noting that the derivative transactions were carried out on the MCX stock exchange platform and that the Assessing Officer had not found any discrepancy in the trading. The CIT(A) noted that the Assessing Officer had relied upon information received from the Investigation Wing concerning transactions through M/s. Marigold Vanijya Pvt. Ltd. The statement of the director of that company, Sri Sachet Saraf, had been retracted. The CIT(A) also noted that the Assessing Officer had not carried out any further investigation. Although notice under Section 133(6) had been issued to MCX, only part reply was stated to have been received and the Assessing Officer did not discuss the report or reply. The statement of Sri Sachet Saraf had also not been provided to the assessee and cross-examination had not been allowed. The CIT(A) further referred to a co-ordinate Bench decision in which transactions in current year derivatives through M/s. Marigold Vanijya Pvt. Ltd. were held to be genuine.
