INTERGRATOR CONSULTANTS PRIVATE LIMITED ,DELHI vs. DCIT, CENTRAL CIRCLE - 1(4), MUMBAI, MUMBAI

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ITA 2256/MUM/2025Status: DisposedITAT Mumbai25 November 2025AY 2015-1621 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 disallowance of set off of loss of Rs. 47,68,944/- and the addition of Rs. 95,379/- on account of commission were not in accordance with the provisions of law and were directed to be deleted. The Tribunal noted that the AO had not conducted independent inquiries to establish the alleged reversal trades or the involvement of the assessee. The AO failed to prove how the assessee purchased and sold stock options to the alleged counterparty, Rector Investment P Limited, by misusing the online platform. The Tribunal emphasized that the AO did not issue any notice under Section 133(6) to Rector Investment P Limited, nor did they record its statement. The Tribunal found that the revenue failed to indicate or prove any intermediary between the assessee and the alleged counterparty. Furthermore, the Tribunal observed that the CIT(A) had ignored these aspects. Relying on judicial precedents, including decisions of the Delhi High Court in Sabh Infrastructure Limited, the Bombay High Court in Rita Rajkumar Singh, and the Gujarat High Court in Nila Infrastructures Ltd., the Tribunal stated that additions based on conjectures, surmises, suspicion, and unconfronted third-party statements without a proper cash trail are liable to be deleted. The Tribunal also noted that a Coordinate Bench of the ITAT in the case of Laurels Properties Pvt Ltd. had decided an identical issue in favor of the assessee. Consequently, the grounds raised by the assessee were allowed.

What were the facts?

The assessee, Integrator Consultants Pvt Ltd., filed its return for Assessment Year 2015-16 declaring an income of Rs. 10,00,240/-. The case was reopened under Section 147 of the Income Tax Act, 1961, based on information from DDIT(Investigation) regarding coordinated trading in illiquid stock options on the Bombay Stock Exchange, leading to non-genuine losses. The Assessing Officer (AO) noted the assessee incurred a loss of Rs. 47,68,944/- from stock option trading. The AO relied on an SEBI interim order, a Supreme Court decision in Rakhi Trading Private Limited, and a third-party statement from Shri Arun Shah. The AO concluded the assessee generated non-genuine losses and incurred cash expenses for commission. The CIT(A) dismissed the assessee's appeal. The assessee is now appealing to the ITAT against the CIT(A)'s order.

What were the issues?

1. Whether the reopening of assessment under Section 147 of the Income Tax Act, 1961, was illegal, bad-in-law, or void for want of jurisdiction, and whether it was based on borrowed satisfaction without independent application of mind by the AO. Assessee's Contention: The reopening was illegal and based on borrowed satisfaction without independent inquiry. It was based on information from the Investigation Wing and a SEBI interim order, which was later set aside, and no independent inquiry was conducted by the AO to form a 'reason to believe'. 2. Whether the CIT(A) erred in upholding the disallowance of set off of loss of Rs. 47,68,944/- incurred on stock option trading and the addition of Rs. 95,379/- on account of alleged ad-hoc commission. Assessee's Contention: The loss was incurred in the normal course of business through online transactions on a recognized stock exchange as a bonafide trader. The CIT(A) ignored supporting documents like demat statements, ledger, financial statements, and bank statements. The reliance on Shri Arun Shah's statement was misplaced as he did not state anything incriminating against the assessee. The assessee was not provided with Shri Arun Shah's statement or an opportunity to cross-examine him, violating principles of natural justice. The disallowance and addition were based on guesswork, suspicion, and presumption without establishing a cash trail. The assessee relied on ITAT decisions in Kundan Rice Mills Ltd. and Laurels Properties Pvt Ltd., and High Court decisions in Sabh Infrastructure Limited, Rita Rajkumar Singh, and Nila Infrastructures Ltd. Revenue's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 69C,Section 133(6)

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Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, “C” BENCH MUMBAI

Before: HON’BLE SHRI SANDEEP GOSAIN& SHRI GIRISH AGRAWAL

For Appellant: Shri Ravi Gantra
For Respondent: Shri Virabhdra Mahajan, Sr. DR
Hearing: 24.09.2025Pronounced: 25.11.2025

आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. आयकर आयु�(अपील) / Concerned CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण,मु�बई/ DR, ITAT, Mumbai 5. गाड� फाईल / Guard file. 6.

आदेशानुसार/BY ORDER, स�ािपत �ित //True Copy//

1.

उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�बई मु�बई / ITAT, Mumbai मु�बई मु�बई

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