BHARAT SURENDRA PANDYA,MUMBAI MAHARASHTRA vs. DCIT-16(2),MUMBAI, MUMBAI MAHARASHTRA

In this appeal, the Assessee has raised the following grounds of appeal:

Ld. Counsel for the assessee, at the outset, submitted that the Assessing Officer, while completing the reassessment, made an addition of ₹1,62,30,000/-, even though the assessee had received only ₹10,95,619/- as profit on sale of commodities. Ld. Counsel for the assessee submitted that the assessee had repeatedly denied having received any sum of ₹1,62,30,000/-, and an affidavit was also furnished before the Ld. CIT(A) denying receipt of such sum. Ld. Counsel submitted that even the bank statements furnished by the assessee do not reflect the receipt of the said amount by the assessee. Ld. Counsel for the assessee submitted that the addition was made solely on the basis of the investigation report and in spite of the assessee denying receipt of such amount the Assessing Officer failed to conduct any inquiry.

Ld. Counsel for the assessee also made submissions as under:

On the other hand, Ld. DR supported the orders of the authorities below.

We have heard the rival submissions, perused the orders of the authorities below and the material placed before us.

On perusal of the assessment order, it is observed that the Assessing Officer, based on the information received from the Deputy Director of Income Tax (Inv.), Unit-3(1), Kolkata through DCIT (HQ) to CCIT-1, Mumbai, issued notice u/s 148 of the Act to the Assessee for reopening the assessment on the ground that the assessee had undertaken transactions of buying and selling of commodities, resulting in escapement of income of ₹1,62,30,000/- for the assessment year 2012-13. In the course of the assessment proceedings, the reasons for reopening were furnished to the assessee, according to which the assessee had undertaken sales transactions of ₹1,62,30,000/- on the National Multi Commodity Exchange platform through broker RK Commodity against a purchase value of ₹5,35,000/-. The assessee was asked to furnish bank statements, contract notes, etc. The assessee stated before the Assessing Officer that he had earned only ₹10,95,619/- from trading in commodities and had not received any other sum as alleged in the reasons. However, the Assessing Officer, based on the information received from the Investigation Wing and also since the notices issued u/s 133(6) were not responded to by RK Commodity and the National Multi Commodity Exchange, concluded that the assessee had undertaken sales transactions of commodities to the extent of ₹1,62,30,000/- and brought to tax. Before the Ld. CIT(A), the assessee furnished an affidavit stating that he had never undertaken any such transaction and also placed the bank statements to prove that he had earned only ₹10,95,619/- and that no other transaction had taken place. However, the Ld. CIT(A) sustained the addition made by the Assessing Officer. We observe that the Assessing Officer made the addition of the entire purported sale consideration of ₹1,62,30,000/- solely on the basis of the report of the Investigation Wing without making any inquiry, especially when the assessee was denying having entered into any such transaction and had placed the bank statements before the Assessing Officer as well as the Ld. CIT(A), contending that no such transaction had ever taken place and that the only transaction undertaken by the assessee was the sale of commodities to the extent of ₹10,95,619/-. The contentions of the assessee were completely brushed aside without making any inquiry by the Assessing Officer, which cannot be appreciated. Therefore, in the facts and circumstances of the case, the addition made by the Assessing Officer cannot be sustained. Accordingly, we direct the Assessing Officer to delete the addition of ₹1,62,30,000/- made u/s 69A of the Act. Ground No. 1 of the grounds of appeal of the assessee is allowed. The other grounds are left open at this stage.

In the result, the appeal of the assessee is partly allowed as indicated above.