NAVRATAN MANAGEMENT PRIVATE LIMITED,MUMBAI vs. DY.COMM CENTRAL CIRCLE 8(4) MUMBAI, MUMBAI

ITA 3586/MUM/2024Status: DisposedITAT Mumbai04 April 2025AY 2017-1823 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the approval granted by the Additional Commissioner was invalid due to insufficient time to apply his mind and lack of specific reasons. The Tribunal also noted that the approval was for multiple assessment years, contrary to legal requirements.

What were the facts?

The assessee, engaged in share trading, purchased shares of M/s. Utility Supply Pvt. Ltd. at Rs. 10 per share. The Assessing Officer (AO) invoked Section 56(2)(viia) of the Income Tax Act, adding the difference between the fair market value and purchase price as income. The assessee contended the shares were stock-in-trade, not a capital asset, making Section 56(2)(viia) inapplicable.

What were the issues?

Whether the addition under Section 56(2)(viia) is valid when shares are held as stock-in-trade, and whether the approval granted by the higher authority was valid given procedural irregularities.

Which sections of the Income-tax Act were involved?

Section 56(2)(viia),Section 153D

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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY

Per : Narender Kumar Choudhry, Judicial Member: This appeal has been preferred by the Assessee against the order dated 14.06.2024, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short `the Act') for the A.Y. 2017-18. 2. Brief facts relevant for adjudication of the instant appeal are that the Assessee during the assessment year under consideration being engaged in share trading and investment activities, had declared its income at loss of Rs

The order continues below.

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