PREETI PANKAJ AGARWAL,MUMBAI vs. INCOME TAX OFFICER 21(2)(5), MUMBAI

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ITA 1145/MUM/2023Status: DisposedITAT Mumbai26 July 2023AY 2011-20125 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the short holding period and the minor loss incurred due to market fluctuation indicated genuine trading activity. The AO's addition of the purchase consideration and notional brokerage was not sustainable.

What were the facts?

The assessee engaged in share trading and purchased shares of M/s SVC Resources Ltd. for Rs. 1,55,936/- and sold them three days later for Rs. 1,51,641/-, incurring a loss. The Assessing Officer (AO) made an addition of the purchase consideration and notional brokerage, treating it as unexplained investment and commission.

What were the issues?

Whether the purchase and sale of shares within a short period, resulting in a minor loss, constitutes an unexplained investment and notional brokerage, or genuine share trading activity.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI ABY T. VARKEY, JM

For Appellant: Shri Hiten Vasant
Hearing: 28/06/2023Pronounced: 26/07/2023

O R D E R

PER ABY T. VARKEY, JM:

1.

This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 17.02.2023 for AY. 2011-12.

2.

At the outset, the Ld. AR assails, the action of Ld. CIT(A) confirming the action of AO making addition of Rs. 1,55,500/- and Rs. 7,775/- on purchase and sale of shares of M/s SVE Resources Ltd. 3. Brief facts are that the assessee is an individual had filed her original return of income on 28.09.2011 declaring total income of Rs. Nil for AY. 2011-12. Later, the case of the assessee was reopened by issuance of notice u/s 148 of the Income Tax Act, 1961 (hereinafter “the Act”) dated 30.03.2018 on the ground that the assessee had transacted in the penny-stock named M/s. SVC Resources Ltd. And AO after re-opening the assessment, heard the assessee and not satisfied with the replies of assessee made an addition of Rs.1,55,500/-

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