SILVER STREAM EQUITIES PRIVATE LIMITED,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEAL) , MUMBAI

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ITA 3980/MUM/2023Status: DisposedITAT Mumbai28 March 2025AY 2014-15Bench: SHRI SAKTIJIT DEY, HON'BLE (Vice President), SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER I.T.A. No. 3980/Mum/2023 Assessment Year: 2014-15 Silver Stream Equities Private Limited 507, 5th Floor, Western Edge-1 Western Express Highway Off D.P. Road Borivali West Mumbai - 400066 [PAN: AADCK5877H] अपीलार्थी/ (Appellant) Vs NFAC, Delhi प्रत्यर्थी/ (Respondent) Assessee by : Shri Satish Kumar, A/R Revenue by : Shri Bhangepatil Pushkaraj Ramesh, Sr. D/R सुनवाई की तारीख/Date of Hearing 1 pages

AI SummaryAllowed

Facts

The assessee, Silver Stream Equities Private Limited, filed its return for AY 2014-15. The assessment was completed, but later reopened based on information that the assessee was a beneficiary of fictitious trades in illiquid options derivatives, leading to a disallowed loss of Rs. 2,07,67,350/-. The assessee contended that the reopening was bad in law and the disallowance was unjustified.

Held

The Tribunal held that the reopening was based on suspicion rather than concrete reasons to believe income had escaped assessment, and that the disallowance of the loss was not supported by adverse evidence. The trades were found to be genuine, facilitated by BSE incentive schemes.

Key Issues

Whether the reopening of assessment was validly done and whether the disallowance of loss from derivative transactions was justified based on available material.

Sections Cited

143(3), 148, 147, 10(38)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE

For Appellant: Shri Satish Kumar, A/R

Hearing: 26/03/2025Pronounced: 28/03/2025

O R D E R

PER NARENDRA KUMAR BILLAIYA, AM:

1. This appeal by the assessee is preferred against the order dated 06/10/2023 by NFAC, Delhi, [hereinafter ‘the ld. CIT(A)’] pertaining to AY 2014-15.

2. The grievance of the assessee reads as under:- “1. The CIT(A) NFAC erred in law in confirming the reopening of a completed assessment without appreciating that the mechanical reopening of the already assessment is bad in law, invalid and liable to be quashed in as much: a) the impugned reasons recorded for reopening of the assessment at best be considered as reasons to suspect and not reasons to believe of escapement of income; b) the impugned reopening of the completed assessment was purely on the directions of the Investigation Wing of the Income-tax Department without requisite enquiry by the AO himself and therefore, was on simply on the borrowed reasons; c) without any tangible material available with the Ao and without disclosing which material facts were not fully and truly declared by the assessee during the original scrutiny assessment completed vide assessment order passed u/s 143(3) of the Act on 29/08/2016; d) without proper application of mind by the AO as the notice u/s 143(2) of the Act dated 17.06.2021 issued Prior to providing the reasons recorded for reopening the completed assessment own 23/06/2021; e) without disposing off the assessee's objections to the impugned reopening by a speaking order as has been held by the Hon'ble Apex Court; f) without giving reasonable opportunity to respond as the SCN dated 09.03.2022 was to be replied by 13.03.2022; g) without objectively meeting the contentions of the appellant made during the appellate proceedings in his appellate order; Thus, the impugned notice issued u/s 148 of the Act and the consequent assessment order passed u/s 147 of the Act are void ab initio and must be quashed.