The assessee company which is engaged in share trading activities in various stock exchanges including F&O, commodities share trading and currency trading had filed its return of income for A.Y. 2013-14 on 25.09.2013. During assessment proceedings, AO observed that the assessee made gain of Rs.5,73,96,307/- in the business of trading in commodities. This gain was ‘set off’ against the loss of Rs.5,56,42,339/- from F&O transactions, and a further loss of Rs.1,82,496/- from currency transactions. It was observed by the A.O that the assessee had shown a net profit of Rs.21,25,794/- from its various share trading activities etc. When asked, assessee submitted that only one commodity transaction was entered in MCX and all other transactions were off market transactions which were through M/s Kaynet Commodities Pvt. Ltd. Assessee produced before the AO ‘bills’ of the off market trading that was carried out during the year. AO in order to verify the genuineness of the claim of the assessee issued summons under Sec. 131 to the Director of M/s Kaynet Commodities Pvt. Ltd. and recorded his statement under oath. Shri Mukesh Shah, Director of M/s Kaynet Commodities Pvt. Ltd. in his statement admitted before the AO that his company had not made any off market transactions with other clients. AO held a conviction that the commodity gains of Rs.5,73,96,307/- claimed by the assessee were in the nature of artificially engineered gains that were created to ‘set off’ against the ‘loss’ incurred in F&O transactions. The AO that all the purchase and sale transactions were merely carried out by the assessee on a plain piece of paper and no movement of actual funds and only a journal entry was passed on 28.12.2012 and 05.01.2013 amounting to Rs.1,00,00,000/- and Rs.1,42,00,000/-, respectively, in the ledger of M/s Kaynet Commodities Pvt. Ltd. AO thus characterised the amount of Rs.5,73,96,307/- as an unexplained cash credit under Sec.68 of the Act. The AO further held that addition made under Sec.68 could not be taken as income under any specific head of income, therefore, ‘set off’ of the F&O loss against the said deemed income could not be allowed. On appeal the CIT(A) allowed the appeal. On further appeal by the Revenue, the ITAT observed that assessee had placed on record the complete details i.e. name and address of the counter party viz. M/s Sneha Metal Pvt. Ltd. with the A.O, but the AO had not deemed it fit to make any enquiry with the said party. The Tribunal held that in case the A.O had any serious doubts as regards the identity and creditworthiness in respect of the counter party which was identified in the course of the assessment proceedings, then it was open for him to have made further enquiries, which we find has not been done by him. The Tribunal held that the commodities transactions were carried out by the assessee throughout the year, thus the same clearly dislodges the observation of the A.O that the profit generated therefrom was prompted with an intent to ‘set off’ the same against the loss suffered by the assessee in the F&O transactions. The Tribunal further observed that though an amount of Rs.2,42,00,000/- was adjusted through journal entries, however, the payment of Rs.3,21,50,000/- was received through account payee cheques, which thus clearly established the movement of actual funds in respect of the aforesaid transactions. The Tribunal therefore held that profit of Rs.5,73,96,307/- from commodities transactions cannot be held as an unexplained cash credit under Sec.68. The Tribunal further held that Sec.115BBE was brought on the statute by the Finance Act, 2012 with effect from 01.04.2013. On a perusal of the said statutory provision, as was then so available on the statute and was applicable to the case of the assessee for the year under consideration i.e A.Y.2013-14, no restriction was placed as regards ‘set off of losses against the income referred to in Sec.68, 69, 69A, 69B, 69C and 69D. Rather, the legislature in all its wisdom by amending Sec. 115BBE vide Finance Act, 2016 w.e.f 01.04.2017 had only w.e.f A.Y. 2017-18 placed a restriction on ‘set off of losses, in addition to raising of any claim of expenditure and allowance against such income. The fact that the aforesaid amendment of Sec. 115BBE by the Finance Act, 2016, w.e.f 01.04.2017 is prospective in nature was mentioned in CBDT Circular No. 3/2017, dated 20.01.2017. Thus even if the amount would have been taxable u/s 68, there was no embargo to claim ‘set off’ of losses in the year under consideration. (ITA No. 5650/Mum/2017,  dt. 30 Nov, 2018, (AY. 2013-2014)