Dismissing the appeal of the revenue the Court held that; The AO cannot treat losses from off market commodity transactions as bogus and inadmissible in the eyes of the law if the transactions through the broker are duly recorded in the books of the assessee. The broker has also declared in its books of accounts and offered for taxation. To hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence. The fact that the broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus. No material was broght to show that off market transactions are prohibited. (ITAT No.78 of 2017 GA No.747 of 2017, dt. 19.06.2018)( AY. 2009-10)
PCIT v. BLB Cables and Conductors Pvt. Ltd. (Cal.)(HC), www.itatonlne.org
S. 73 : Losses in speculation business-Commodity trading–Off market transaction-The AO cannot treat losses from off market commodity transactions as bogus and inadmissible in the eyes of the law if the transactions through the broker are duly recorded in the books of the assessee-The fact that the broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus.