Ita/133/2015 Of Commissioner Of Income Tax v. M/S Gobind Castings P Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. ITA1332015 (O&M)Date of decision:28 O7AOLS Pr. Commissioner of Income Tax (Central), Ludhiana. ..Appellant Versus. M/s Gobind Castings (P) Ltd. ...Respondent CORAMHONBLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICEHON5BLE MR. JUSTICE G.S. SAANDHAWALI Present: Mr. Rajesh Katoch, Advocate,for the appellant. ee S.J. VAZIFDAR, A.C.J. (QRAL) This is an appeal against the order of the Income Tax Appellate| Tribunal dated 25.11.2014 dismissing the appellant/department’s appeal against the order of the CIT (Appeals). The matter pertains to the assessment year 2006-2007. oOThe only issue pressed is as follows:- “(i) Whether on the facts and circumstancesof the case and in law the ld. ITAT isjustified in upholding the finding of theCIT(A) that the transactions in derivative|trading of commodity shown by the assessee|were genuine transactions? 3 |Mr. Katoch says that the result of the other issues will follow the| result in respect of the first issue. 4AThe question, therefore, is whether the derivative transactions entered into by the respondent/assessee are genuine or not. As noted by the Tribunal, the assessee had allowed the broker to retain the profits earned in order to provide more margin and most of the times funds remained with the broker. The CIT (Appeals) and the Tribunal have held the derivative weighing the evidence. The issue does not raise a substantial question oflaw. It essentially involves an appreciation of the evidence. It was held thatthe mere fact that no brokerage was paid in advance does not indicate thatthe transactions are not genuine. That would depend upon the relationshipbetween the broker and the client. It is possible that brokerage could even beadjusted from the receipts. It is also possible that brokerage could be paidsubsequently. The broker not having answered the summons cannot be heldagainst the respondent/assessee. Nothing prevented the appellant tromenforcing his attendance. The accounts of the broker tallied. We agree thatthe broker having not paid the service tax cannot be held against theassessee. As rightly observed, the broker may not have even crossed thelimit making him liable to pay the service tax. 5 _In these circumstances, there is no warrant for interfering with thefinding of fact that the transaction is genuine. | 6_AS we mentioned earlier, the result of the other issues raised|follows the result on the first question. vanThe appeal is accordingly dismissed. | 28.07 2015)Amodh (S.J. VAZIFDAR)ACTING CHIEF JUSTICE (G.S. SANDHAWALIA)JUDGE