HOMERICK BUILD PVT. LTD.,AHMEDABAD vs. THE ITO, WARD-2(1)(1), AHMEDABAD

ITA 1993/AHD/2025Status: DisposedITAT Ahmedabad23 September 2026AY 2015-167 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided to delete the addition of INR 75,64,838/- made under Section 68 and consequently the addition of INR 1,51,297/- made under Section 69C. The Tribunal noted that the assessee had disclosed profits of INR 73,76,700/- from BSE-FO trades and offered them to tax. The assessee provided supporting documents like contract notes, bank statements, and annual reports to demonstrate that the transactions were part of its regular business and not pre-arranged. The Tribunal observed that the AO's reliance on SEBI's findings and the Supreme Court's decision in Rakhi Trading Private Limited was misplaced because, in this case, the assessee had made profits, not losses, and the AO did not identify any loss-making counter-parties. The Tribunal applied the test of preponderance of possibility in favour of the assessee. The Tribunal allowed Grounds 1, 3, and 4, and dismissed Ground 2. The operative direction is the deletion of the additions.

What were the facts?

The assessee, Homerick Build Pvt. Ltd., is appealing against an order dated 20/08/2025 by the National Faceless Appeal Centre (NFAC), Delhi, which dismissed its appeal against an assessment order dated 29/03/2022. This assessment order was passed under Section 147 read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2015-2016. The original return for AY 2015-2016 declared a loss. Reassessment proceedings were initiated based on information regarding coordinated and pre-determined trades on the Bombay Stock Exchange (BSE), involving reversal trades in ill-liquid stock options. The Assessing Officer (AO) treated INR 75,64,838/- as unexplained cash credit under Section 68 and INR 1,51,297/- as unexplained expenditure under Section 69C for commission. The CIT(A) confirmed these additions.

What were the issues?

1. Whether the Learned CIT(A) erred in confirming the addition of Rs. 75,64,838/- on account of trade reversible profit and Rs. 1,51,297/- on account of commission, contrary to the assessee's submissions and the fact that the entire income from BSE trades was offered to tax, leading to double taxation? (Question of law and fact, related to Sections 68 and 69C). 2. Whether the notice under Section 148 was illegal and commensurate with the return of income, given that all income from BSE trades was already offered to tax? (Question of law and fact). Assessee's Contentions: - The Learned CIT(A) failed to consider submissions made during appellate proceedings. - The profit added back is tantamount to double taxation, as the reverse trade profit was already included in the appellant's profit. - The notice under Section 148 is illegal and the entire income from BSE trades was offered to tax. - The additions made by the AO and confirmed by the CIT(A) should be deleted on merits. Revenue's Contentions: - The judgment records no specific contentions for the revenue on these grounds, but the AO's assessment order and the CIT(A)'s order confirm additions based on the belief that the trades were pre-determined and non-genuine.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 68,Section 69C,Section 143(3),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, A” BENCH, AHMEDABAD

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal preferred by the Assessee is directed against the Order, dated 20/08/2025, passed by National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the 'CIT(A)'] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 29/03/2022, passed under Section 147 read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'], for the Assessment Year 2015-2016

2.

The Assessee has raised the follow

The order continues below.

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