IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.TA. Nos.442 & 443/Ahd/2023 (Assessment Year: 2010-11 & 2013-14)

Dy. Commissioner of Vs. M/s. N.K. Industries Ltd., Income-tax, 7^th Floor, Popular House, Ashram Circle3(1)(1), Road, Ahmedabad-380015 Ahmedabad [PAN : AAACN 9376 P]

I.TA. Nos.447 & 448/Ahd/2023 (Assessment Year: 2010-11 & 2013-14)

M/s. N.K. Industries Ltd., Vs. M/s. N.K. Industries Ltd., 7^th Floor, Popular House, Ashram 7^th Floor, Popular House, Ashram Road, Ahmedabad-380015 Road, Ahmedabad-380015 [PAN : AAACN 9376 P] [PAN : AAACN 9376 P]

(Appellant) .. (Respondent Assessee represented by : Shri S.N. Soparkar, Sr. Advocate &

Shri Parin Shah, AR Department represented by: Shri R.N. Dsouza, CIT-DR &

Shri B.P. Srivastava, Sr. DR.

Date of Hearing 06.03.2025 Date of Pronouncement .04.2025

O R D E R

PER: DR. B.R.R. KUMAR, VICE PRESIDENT:

These cross appeals have been filed by the Revenue and the Assessee against the orders of the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short) of even dated 30.03.2023 passed u/s 250 of the Income-tax Act, 1961, (hereinafter referred to as "the Act" for short) for the Assessment Years 2010-11 & 2013-14.

Issue : Speculative Transactions ITA No. 442/Ahd/2023 : AY 2010-11 – By Revenue – Ground No. 1 ITA No. 443/Ahd/2023 : AY 2013-14 – By Revenue – Ground No. 1 ITA No. 447/Ahd/2023 : AY 2010-11 – By Assessee – Ground No. 3

2. At the outset, both the parties brought to our notice that the issue stands covered by the decision of ITAT in assessee’s own case in ITA No. 329/Ahd/2017 for AY 2011-12 vide order dated 16.11.2022 and also in 328/Ahd/2017 for AY 2011-12. For the sake of ready reference, the relevant part of the order is reproduced hereunder:-

“5. The action of the Assessing Officer in treating the amount of Rs.14,42,91,136/- as speculative loss was challenged by the assessee in an appeal filed before the learned CIT(A) and the following submissions were made on behalf of the assessee before the learned CIT(A) in writing in support of its case that the amount in question being finance charges/interest was deductible as business expenditure and the Assessing Officer was not justified in treating the same as speculative loss:-

“5. Regarding addition on account of trading transactions on NSEL platform and loss incurred at Rs. 14,42,91,136/-.

5.1 The Assessing Officer in para 4 of the assessment order has referred trading practice of the commodities on NSEL i.e. National Spot Exchange Ltd. It is stated that as per the mechanism the sellers of a particular commodity brings their goods to the godown operated by National Spot Exchange and get receipt online for such goods and thereafter they can sell the receipt to the buyer online, the buyer will pay the amount and on producing the receipt they can get the material. It is stated that the buyer can also sell the receipt to other buyer. According to him there is supposed to be a settlement cycle for the commodities to be traded on NSEL. It is stated by the AO that the buyer was supposed to pay the money to the seller for the entire lot to be purchased by him on the date of settlement of the cycle. However, in reality, it did not happen and quantity of goods was never delivered. The cycle was settled by repayment of whole amount of money back to the buyer i.e. the purchaser sold the goods back to the seller. Thus, the financial transactions took place through NSEL. In para 5.3 of the order, the AO has stated as under-

"5.3 The borrowers and lenders entered into a pair of contracts for every deal. First, there was a three-day contract that mandated that within two days of signing it, the investor will lend the money and the borrower will hand over a warehouse receipt. Simultaneously, they entered into a 36-day contract, which said 35 days after cutting the deal, the borrower will pay back a