The judgment of the court was delivered by
Ajay Kumar Mittal, J.- This appeal has been preferred by the appellant-assessee under section 260A of the Income-tax Act, 1961 (in short, "the Act") against the order dated July 6, 2015, annexure-A.6 passed by the Income-tax Appellate Tribunal, Division Bench, Chandigarh (in short, "the Tribunal") in I. T. A. No. 1177/Chd/2013 for the assessment year 2006-07, claiming the following substantial questions of law :
"A. Whether under the facts and circumstances of the case, the Income-tax Appellate Tribunal is not justified in confirming the part of commodity loss of Rs. 4,20,824 out of Rs. 7,16,617 (annexure A.7) arising from genuine and regular dealings all through account payee cheques (annexure A.8) and for which contract notes/difference in bills produced with registered broker M/s. Anand Commodities Trading Services Pvt. Limited (annexure A.7) whom the Assessing Officer failed to summon as requested by the appellant that the Assessing Officer to summon the said representative under section 131 of the Income-tax Act, 1961 which is against trite law that in case on the request of the assessee the Assessing Officer fails to summon the creditors or other concerned persons then in that case, no addition can be made on this basis which is against the law laid down in the judgment of this hon'ble High Court in the case of I. T. A. No. 685 of 2008 as decided on February 17, 2009 and as reported in CIT v. Brij Pal Sharma [2011] 333 ITR 229 (P&H) ; 28 DTR 118 (P&H) ?
B. Whether under the facts and circumstances of the case, the Income-tax Appellate Tribunal and the authorities below are justified in confirming disallowance of commodity loss on the ground that the appellant has not produced any evidence ignoring the account books, complete correspondence with M/s. Anand Commodity Services Pvt. Limited a registered broker in the shape of ledger account, contract details, difference in bills, commodity wise, date wise and amount wise (annexure A.7) and the payments by the appellant and the transactions being through banking channels (annexure A.8) which is perverse findings of fact against sufficient evidences/material produced and on record therein ?
C. Whether under the facts and circumstances of the case, the order passed by the Income-tax Appellate Tribunal, and the authorities below confirming the impugned additions without adhering to various contentions, evidences filed in its true prospective is perverse and illegal ?
2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant is a stock broker. He filed return of income for the assessment year 2006-07 declaring income at Rs. 19,26,586. He is dealing in equity and derivatives trading for his clients and for himself as proprietor of M/s. SMS and Co. The commodities trading was done by the appellant through M/s. Anand Commodities Services limited during the assessment year 2006-07 from May 2, 2005 to February 24, 2006 and also in various other years. He used to deal through other brokers also. The appellant received notice under section 143(2) of the Act in response to which he appeared and submitted reply. During the assessment proceedings, the Assessing Officer raised objection regarding trading liability amounting to Rs. 3,95,614 which was later on deleted by the Tribunal and also regarding commodity loss of Rs. 7,16,617 incurred by the appellant out of which Rs. 3,16,697 was for and on behalf of his clients and which was recovered from them while the balance loss of Rs. 4,20,824 was on account of his own commodity trading loss which was disallowed by the Assessing Officer, vide order dated December 4, 2008, annexure A.1. Against the said order, the appellant filed appeal before the Commissioner of Income-tax (Appeals) (CIT(A)) which was partly allowed vide order dated February 26, 2009, annexure A.2 holding that the addition could be made if there was positive evidence to show that such an entry was an ingenuine entry and that the same was on account of some ingenuine loss and it was adjustment entry to reduce the profit of business of the appellant. The Revenue filed an appeal against the order dated February 26, 2009, annexure A.2. Vide order dated June 26, 2009, annexure A.3, the Tribunal remanded the issue to the Assessing Officer. During the remand proceedings, contract notes and difference bills which were in the possession of the appellant were produced before the Assessing Officer. However, the Assessing Officer vide order dated December 13, 2010, annexure A.4 held that there was no concrete evidence and therefore confirmed its previous order. Aggrieved thereby, the appellant filed an appeal before the Commissioner of Income-tax (Appeals). The appellant filed copies of contract note/difference bills along with reply dated March 21, 2013. To verify the genuineness of the alleged commodity transactions made by the assessee, a letter dated April 3, 2013 was written by the Commissioner of Income-tax (Appeals) to the manager, LSE Commodities Trading Services Limited. However, Ludhiana Commodities Trading Services Limited in reply dated April 8, 2013 intimated that no client as M/s. SMS and Company as a client of M/s. Anand Commodities Services Limited in the year 2005-06 was existing. After considering the reply dated August 30, 2013, the appellant was directed to present authorized representative of M/s. Anand Commodities Trading Services Pvt. Limited for cross examination. The appellant requested for summoning of the concerned persons under section 131 of the Act. However, no action was taken. The appeal was dismissed vide order dated November 11, 2013, annexure A.5 holding that the appellant failed to lead any evidence in order to prove the genuineness of the transactions. The appellant filed an appeal before the Tribunal which was partly allowed, vide order dated July 6, 2015, annexure A. 6 upholding the addition of Rs. 4,20,824. Hence, the instant appeal by the appellant-assessee.
3. We have heard learned counsel for the appellant-assessee and do not find any weight in the contentions raised by him.
4. Learned counsel for the appellant-assessee submitted that the Assessing Officer had failed to summon the authorised representatives of M/s. Anand Commodities Trading Services to prove the genuineness of the transactions undertaken by the appellant and therefore, the findings against the appellant are vitiated. Reliance was placed on the judgment of this court in I.T.A. No. 685 of 2008 decided on February 17, 2009 (CIT v. Brij Pal Sharma reported in [2011] 333 ITR 229 (P&H)).
5. From the perusal of the findings recorded by the authorities below, we find that the onus was upon the assessee to prove the genuineness of the transactions by producing the relevant evidence and the material on record which he failed to do. He was unable to produce the authorised representatives of M/s. Anand Commodities Trading Services as the initial onus was upon him to establish genuineness of the loss. Opportunity was given to the appellant in this regard. The evidence collected from Ludhiana Stock Exchange and confronted to the assessee proved that the commodity transaction was not actually carried out but was merely accommodation entries. Further, Ludhiana Commodities Trading Services Limited in reply dated April 8, 2013 to the query dated April 3, 2013 by the Commissioner of Income-tax (Appeals) intimated that M/s. SMS and Company Prop. Shri Sham Sunder Khanna was not registered as a client with M/s. Anand Commodities Services Limited in the year 2015-16. The assessee-appellant was prima facie required to prove the validity of the transaction. The assessee having failed to do so, no right accrues in his favour on account of non- summoning of the witness under section 131 of the Act by the Assessing Officer. It has been categorically recorded by the Tribunal in its order dated July 6, 2015 that the assessee merely produced copies of notes from M/s. Anand Commodity Services that he suffered genuine loss. Even the Tribunal while remanding the matter to the Assessing Officer directed the assessee to produce the requisite material and evidence to prove the genuineness of the loss in question. The assessee failed to produce any material. Thus, the authorities were justified in maintaining the addition of Rs. 4,20,824. The relevant findings recorded by the Tribunal read thus :
"11. As regards the loss of commodity is concerned, the enquiries from Ludhiana stock exchange revealed that claim of loss on account of commodity transaction was not a genuine claim. The assessee merely produced copy of notes from M/s. Anand Commodity Ser vices, would not prove that the assessee suffered genuine loss. The evidences collected from Ludhiana stock exchange and confronted to the assessee clearly proved that the commodity transaction was not actually carried out but was merely accommodation entries. Earlier the Tribunal, while restoring the matter to the file of the Assessing Officer directed the assessee to produce the requisite material and evidence to prove the genuineness of the loss in question. The asses see, however, failed to produce any requisite material and evidence before the Assessing Officer in set aside proceedings to prove the genuineness of the loss in question. Therefore, the authorities below were justified in maintaining the addition of Rs. 4,20,824. This ground of appeal of the assessee is accordingly, dismissed."
6. Learned counsel for the appellant was unable to show any material to controvert the findings recorded by the authorities below. The judgment cited by the learned counsel for the appellant-assessee in Brij Pal Sharma's case(supra) was based on individual fact situation involved therein. Thus, the appellant cannot derive any advantage from the said decision. Consequently, no substantial question of law arises and the appeal stands dismissed.