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| The Tax Publishers2020 TaxPub(DT) 4378 (Kol-Trib) INCOME TAX ACT, 1961
Section 72
Where genuineness of transactions made by assessee on Stock Exchange was duly established, the action of AO in disallowing the claim of the assessee for resultant loss in commodity market transactions, would not be tenable.
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Loss - Allowability - Commodity market transactions -
A search and seizure action under section 132 was conducted in case of assessee-company. AO disallowed assessee's claim for loss in commodity market transactions by treating the same as bogus. The said claim was disallowed on the basis of information received by AO that the concerned broker company named 'M' allegedly provided entries of bogus loss to the assessee as admitted by the director of the broker company in the statement recorded during course of search and seizure action. Held: A perusal of the order of AO showed that enquiry was directly made by him from the Stock Exchange by issuing notice under section 133(6) in order to verify the transactions entered into by the assessee through broker company 'M'. Further, in reply to the said notice, the Stock Exchange had not only confirmed the transactions but also furnished the required information along with details of all the transactions made by the assessee during the year under consideration through 'M'. Therefore, genuineness of the transactions made by the assessee on the Stock Exchange through 'M' was duly established and accordingly, action of the AO in disallowing the claim of the assessee for resultant loss in commodity market transactions was not tenable.
Followed:Navin Kumar Kajaria v. I.T.O. [ITA No. 1762/KOL/2017 Order, dated 24-5-2018] A.C.I.T v. Tirupati Awas Pvt. Ltd. [ITA No. 1560/KOL/2016, Order, dated 28-3-2018]
REFERRED : Cimsys Research India Pvt. Ltd. v. ITO [ ITA No. 1435/KOL/2018 Order, dated 26-2-2020]
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, KOLKATA BENCH
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