MR DEEPAK JAGDISHRAM GUPTA,MUMBAI vs. INCOME TAX OFFICER, WARD-17(1)(3), MUMBAI

The assessee has challenged the various additions made by the Assessing Officer (A.O. for short) and confirmed by the ld. CIT(A). As there was no representation on behalf of the assessee, we hereby proceed to decide the appeal sans the assessee by hearing the learned Departmental Representative (ld. DR for short) for the Revenue and on perusal of the materials available on record. income for the year under consideration. Based on the information received from DDIT(Investigation) pursuant to a search and seizure action carried on Shri Naresh Jain and his associates, it was found that certain persons were involved in the transaction on stock exchange for the purpose of obtaining bogus business loss, long term capital gain and short term capital loss for various beneficiaries in the script of VMS Industries Limited. It was found that the assessee was one of the beneficiary of such concern for obtaining bogus sale transaction amounting to Rs.58,25,963/-. The assessee’s case was reopened u/s. 147 of the Act by notice dated 31.03.2019 u/s. 148 of the Act. It is observed that the assessee has traded in shares of the following companies tabulated below:

The A.O. passed the assessment order u/s. 144 r.w.s. 147 of the Act for the reason that the assessee has failed to furnish the relevant details sought for by the A.O, thereby making an addition of Rs.3,26,71,056/- u/s. 68 of the Act along with the other additions.

Aggrieved by the impugned addition, the assessee was in appeal before the ld. CIT(A), who confirmed the said addition made by the A.O. for the reason that the assessee has failed to furnish the relevant details even before the first appellate authority.

The learned Departmental Representative (ld. DR for short) for the Revenue contended that the assessee has habitually been non compliant before the lower authorities and before the Tribunal as well. The ld. DR further stated that it is inferred that the assessee has no material evidence to substantiate his claim. The ld. DR relied on the order of the lower authorities.

We have heard the ld. DR and perused the materials on record. It is observed that as per the submission of the assessee that the assessee has wound up all his proprietary business and has been employed since A.Y. 2016-17, and had shifted his residence to Sonipat, Hairyana. The assessee contends that he was unaware of the assessment proceedings and, hence, remained ex parte before the lower authorities. The assessee further submitted that the assessee was into trading in equity and was transacting on daily basis without any intention of investing or purchasing of shares in penny stock. The assessee contended that the impugned addition made by the A.O. was on account of income from business and profession and has also made addition u/s. 68 and 69C of the Act as unexplained cash credit. It is observed that the assessee apart from the above submission has not furnished any details or documentary evidences to support his claim neither before the A.O. nor before the ld. CIT(A). It is also observed that the assessee’s contention that he had incurred trading losses in equity transaction was not supported by any documentary evidences. The A.O. has proceeded to make the addition based on the data received from NSE/BSE and on the basis of the entries of profit made in the The A.O. made an addition of 3% on the profits pertaining to the alleged penny stock.

In the result, the appeal filed by the assessee is dismissed.