ASHA VIREN RAJ ,MUMBAI vs. ITO WARD 34(1)(1), MUMBAI

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ITA 809/MUM/2025Status: DisposedITAT Mumbai20 March 2025AY 2012-13Bench: SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER\n&\nSHRI SANDEEP SINGH KARHAIL, HON'BLE JUDICIAL MEMBER\nI.T.A. No. 809/Mum/2025\nAssessment Year: 2012-13\nAsha Viren Raj\nVs\nIncome Tax Officer, Ward -\n34(1)(1), Mumbai\nPlot No. 7, XCZAR Building\nFlat No. 402, N.S. Road\n1, Azad Nagar Society\nJuhu Scheme\nVilleparle (West)\nMumbai - 400056\n[PAN: AADPR9260J]\nअपीलार्थी/ (Appellant)\nप्रत्यर्थी/ (Respondent)\nAssessee by:\nShri Rajesh Shah, A/R\nRevenue by :\nShri Ram Krishn Kedi10 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 reopening of the assessment under Section 148 was invalid. The notice for reopening was issued on March 28, 2019, beyond four years from the end of AY 2012-13. The reasons provided for reopening did not contain any whisper about the failure of the assessee to disclose fully and truly all material facts necessary for the assessment. The original assessment under Section 143(3) was completed after considering the financial statements. The Tribunal relied on the Bombay High Court decisions in TAO Publishing (P.) Ltd., Sound Casting (P) Ltd., and First Source Solutions Ltd., which held that for reopening beyond four years, a failure to disclose material facts is a jurisdictional requirement, and if not alleged or proven, the notice is issued without jurisdiction. Therefore, the impugned notice under Section 148 and the resultant assessment order were set aside. On merits, the Tribunal observed that the AO himself noted a purchase contract of Rs. 1,07,43,750/- and a sale contract of Rs. 1,09,73,250/-. The Tribunal held that only the profit element should have been considered, which was already declared by the assessee. The addition of the entire sales amount without deducting the purchase amount was wrong. Thus, the addition could not be sustained on merits. The appeal was allowed on both counts.

What were the facts?

The assessee, Asha Viren Raj, filed an appeal against the order of the NFAC, Delhi, for Assessment Year (AY) 2012-13. The appeal was initially time-barred by 37 days, but the delay was condoned. The original assessment was completed under Section 143(3) on March 4, 2015. Subsequently, the Assessing Officer (AO) initiated reassessment proceedings under Section 148 by issuing a notice on March 28, 2019, which was more than four years after the end of the AY. The reasons for reopening were based on information from the Serious Fraud Investigation Office (SFIO) report concerning the National Spot Exchange Ltd. (NSEL) scam, which indicated rampant client code modifications (CCM) by brokers. The assessee was identified as a beneficiary of such transactions, with total trade value of Rs. 2,17,17,000/- (Buy Rs. 1,07,43,750/- and Sell Rs. 1,09,73,250/-). The AO noted that this issue was not taken up during the original assessment as the information was not available then, and alleged failure on the part of the assessee to disclose true and correct facts.

What were the issues?

1. Whether the reopening of assessment under Section 148 of the Income Tax Act, 1961, is valid, considering it was initiated after a period of four years from the end of the assessment year and the original assessment was completed under Section 143(3), and whether there was a failure on the part of the assessee to disclose full and true material facts. - Assessee's contention: The learned CIT(A) erred in confirming the reopening as the AO did not point out any non-disclosure of material facts, and reopening after four years is bad in law. There was no sufficient tangible material to believe income had escaped assessment. The CCM was done by the broker suo moto without the assessee's knowledge or instructions. - Revenue's contention: Not recorded in the judgment. 2. Whether the addition of the entire gross sale value of commodity transactions amounting to Rs. 1,09,73,250/- as unexplained cash credit under Section 68 of the Act is justified, without considering the investment made and the declared profit. - Assessee's contention: The learned CIT(A) erred in confirming the addition of the entire gross sale value without considering the investment of Rs. 1,07,43,750/- and the declared profit of Rs. 2,29,500/-. Once the profit was accepted, no further addition could be made. The CIT(A) wrongly observed that purchases and sales were not incorporated in the books. The addition should have been restricted to the profit element. - Revenue's contention: Not recorded in the judgment. 3. Whether the learned CIT(A) erred in not providing the statements of parties and cross-examination, and whether the addition was based on unverified information from the SFI Office without proving the assessee's involvement in CCM. - Assessee's contention: The addition was based on unverified information from the SFI Office without proving the assessee's involvement in CCM and without providing statements and cross-examination of parties. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 68,Section 131,Section 147,Section 139,Section 142

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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HONBLE & SHRI SANDEEP SINGH KARHAIL, HONBLE

For Appellant: Shri Rajesh Shah, A/R
For Respondent: Shri Ram Krishn Kedia, Sr. D/R

ORDER \nPER NARENDRA KUMAR BILLAIYA, AM:\nThis appeal by the assessee is preferred against the order dated\n30/10/2024 by NFAC, Delhi [hereinafter “the ld. CIT(A)"], pertaining\nto AY 2012-13.\n1.

1. Appeal is time barred by limitation for 37 days. We have\nconsidered the reasons and are satisfied. Delay is condoned.\n2.\nThe grievance of the assessee reads as under:-\n\"1.\nOn facts and circumstances of the case and in law the learned CIT(A) erred in\nconfirming the reopening of the assessment under Section 148 of the Act though the\noriginal assessment was completed under Section 143(3) and full particulars were\navailable before the AO. The learned AO has not pointed out any non-disclosure of full\nand true material facts which lead to reopening of the assessment. The reopening of\nthe assessment is bad in law after the period of four years.\n2.\nOn facts and circumstances of the case and in law the learned CIT(A) erred in not\naccepting the fact that there were no sufficient tangible materials were available before\nthe AO to believe that income has actually escaped the assessment for the purpose of initiating\nreassessment proceedings under Section 148 of the Act.\n3.\nOn facts and circumstances of the case and in law the learned CIT(A) has failed\nto appreciate the submissions of the Appellant that Client Code Modification (CCM) was\ndone by commodity broker suo moto and without the knowledge or instructions of the\nAppellant and there is no involvement of the appellant.\n4.\na) On facts and circumstances of the case and in law the learned CIT(A) erred in\nmaking addition of entire gross sale value of commodity transactions Rs.\n1,09,73,250/- as unexplained cash credit under Section 68 of the Act without\nconsidering the investment made of Rs.1,07,43,750/- and having declared profit\nof Rs.2,29,500/-.\nb) On facts and circumstances of the case and in law, the declared profit of\nRs.2,29,500/- having accepted, no further addition could have been made by the\nAO and wrongly accepted by the CIT(A).\nc) The learned CIT(A) has wrongly observed that the appellant has not\nincorporated purchases and sales transactions as well as the differential value in\nthe books of accounts though the full details were available before the AO as well\nas before CIT(A).\n5.\nOn facts and circumstances of the case and in law the learned CIT(A) erred in not\ngiving the statements of the parties on which reliance is made and the cross examination\nof the said parties. The whole addition was based on information from the SFI Office\nwithout verification and proving the involvement of the appellant in Client Code\nModification.\n6.\nOn facts and circumstances of the case and in law, the AO wrongly applied the\nprovisions of Section 68 of the Act without verification of the ledger account of the\nappellant in respect of the transactions alleged to have been modified by CCM by the\nbroker.\n7.\nOn facts and circumstances of the case and in law and without prejudice to the\nabove, the addition could not have been made of the gross sale value of the commodities.\nThe learned CIT(A) ought to have restricted the profit element involved in the\ntransactions which in any case the appellant had declared to the extent of Rs.2,29,500/-.\n8.\nThe appellant craves leave to add, amend, modify, substitute and / or cancel any\nof the ground of the appeal.”\nRepresentatives were heard at length, case records carefully perused\nand the relevant documentary evidence brought on record duly considered\nin the light of Rule 18(6) of the ITAT Rules, 1963.\n4.\nThe first challenge relates to the validity of the assumption of\njurisdiction u/s 147 of the Act for reopening the completed assessment. The\nimpugned assessment year is AY 2012-13 and the notice u/s 148 of the Act\nserved upon the assessee for reopening the assessment is dated 28/03/2019\nwhich makes the notice issued after four years from the end of the\nimpugned assessment year. The reasons for reopening the assessment\nreads as under:-\nName of the Assessee\nSmt. ASHA V RAJ\nAddress\n18, Kaushalya, 11th Road, JVPD Scheme,\nVile Parle-W, Mumbai-400056\nPAN of the Assessee.\nAADPR9260]\n Assessment year\n2012-13\nDate of return filing\n30.03.2013\nReturn income\nRs.7,07,823/-\nREASONS FOR RE-OPENING U/S, 147 OF THE INCOME TAX ACT, 1961\nIn this case, the assessee has filed his return of income for the A.Y.2012-13 declaring total\nincome of Rs.7,07,823/- on' 30.03.2013. subsequently, the case was selected for scrutiny\nunder CASS for the year under consideration and assessment was completed u/s 143(3.)\nof the IT Act on 04.03.2015 assessing total income at Rs.08,05,020/-.\n2.\nThe Serious Fraud Investigation Office (SFIO) has prepared a detailed report on\nNational Spot Exchange Ltd. (NSEL) scam which has been shared with the Income Tax\nDepartment. This information was received from DDIT(Inv), Unit-6(3), Mumbai vide\nNo. DDIT(Inv)-6(3)/Information/2018-19 datedl5.03.2019 on 16.03.2019 through\nemail. In this report, the findings of SFIO is that the brokers have performed rampant\nclient code modification where, the dummy/ghost client code were used to book trades and\nlater the client codes were modified.\nFollowing the detection of misuse and exploitation of NSEL Exchange platform\nby unscrupulous brokers/traders, the trading on the NSEL Exchange platform had been\nsuspended from 01.04.2012 till 31.07.2013. At the time of suspension of trading activity,\nthere were various brokers who had made several client code modification through sell\nand purchase of commodities. During the enquiry, summons u/s131 of the IT Act was\nissued to the broker Anand Rathi Commodities Pvt. Ltd. (as the maximum client code\nmodifications were done by ARCL) and statement of Shri Chetan Pitamber Bharkhada,\nPresident, Anand Rathi Commodities Pvt. Ltd. was recorded on 12.03.2019 wherein he\nhas stated that “no physical delivery of goods took, place at any time whatsoever in all\ntrades executed on NSEL”. The same finding has been given by the SFIO in its report\nthat “No physical delivery of the goods were ever taken by their clients.\"\n3.\nAs per information, the assessee is one of the beneficiaries who have made the\ncontract in CASTKADI3 and CASTKADI36 with the help of misusing the client code\nmodification during the F.Y.2011-12 relevant to A.Y.2012-13. As per information, the\ntotal trade value of transaction was of Rs.2,17,17,000/- (Buy Of Rs.1,07,43,750/- and\nsell of Rs.1,09,73,250/-) for. A.Y.2012-13.\n4.\nOn going through the assessment order, it is observed that the A.O. has not taken\nup this issue in assessment order as the information was not available at the time of\ncompletion of assessment order u/s 143(3). The assessee did not declare the true and\ncorrect facts of the transaction in its . return of income. Hence, there was a failure on the\npart of the assessee to disclose true and correct facts of income.\n5.\nIn view of this new piece of information on misusing of client code modification\n.for F.Y.2011-12 relevant to A.Y.2012-13, it could be easily, deduced that income in\nexcess of Rs.1,00,000/- assessable to tax has escaped assessment.\n6.\nTherefore, I have reason to believe that in the case of assessee, income above Rs.1\nlac has escaped assessment within the meaning of section u/sl47 of the IT Act,1961. The\ncase is therefore required to be reopened u/s.147 and notice u/sl48 of the IT Act may be\nissued accordingly.\"\n5.\nA careful perusal of the reasons mentioned hereinabove would show\nthat there is not even a whisper about the failure on the part of the assessee\nfor not disclosing truly and fully all material facts relating to the\nassessment. The original assessment order was framed u/s 143(3) of the Act\nvide order dated 04/03/2015 wherein the returned income of the assessee\nwas thoroughly examined after considering the financial statements. The\nprofit and loss account for the year under consideration at the time of the\noriginal assessment proceedings is as under:-\nASHA V. RAJ\nProfit and Loss Account for the year ended 31st March, 2012\nParticulars\nAmount\nParticulars\nAmount\nTo Opening Stock\n5908500 By Sales\n78528329\nTo Purchase\n83033407 By Closing Stock\n12118282\nTo Brokerage\n183626\nTo Transaction Expenses\n76963\nTo Warehouse Charges\n54834\nTo Gross Profit\n1389281\n90646611\nTotal Rs.\n90646611\nTo Audit Fees\n33708 By Gross Profit\n1389281\nTo Bank Charges\n2341\nTo Club Expenses\n5582\nTo Depreciation\n154186\nTo Electricity Exp.\n101780\nTo Professional Fees\n79011\nTo Profession Tax\n2500\nTo Repairs & Maintenance\n72713\nTo Salary & Bonus\n193200\nTo Telephone Expenses\n137207\nTo Net Profit\n607053\nTotal Rs.\n1389281\nTotal Rs.\n1389281\nAs per our Report of even date attached\nFor P.P.Mashru & Coff\nChartered Accountants\nPravin P. Mashru\n(Proprietor)\nMUMBAI\nAVIS\nAsha V. Raj\nPLACE:\nMumbai\nDATE: 29 SEP 2012\nPLACE:\nMumbai\nDATE:\n29 SEP 2012\n5.

1.

The contract notes under consideration are as under:-\nCONTRACT NOTE\nANAND RATHI COMMODITIES LIMITED.\n(Contract Notes issued by Members, acting for client as Agent)\n(Subject to exclusive jurisdiction of the courts in Mumbai only)\nMEMBER OF NATIONAL SPOT EXCHANGE LTD\nNSEL CODE NO:10570 DP ID: CM-BP ID:\nRegd. Off.: 4th Floor, Silver Metropolis, Jai Coach Compound. Opp. Bimbisar Nagar,\nGoregaon (E), Mumbai 400 063.\nTel.: +91 22 6698 3700 Fax: +91 22 6693 3770 E-mail: grievance@rathi.com\nCompliance Officer: Mr. Deepak Kedia. / Email: deepakkedia@rathi.com Tel No.: 40013700\nVisit us at: www.rathi.com\nDEALING OFFICE ADDRESS\nVICTORA-COMMODITY\nLOWER PAREL\nFax: OWN\nTo: ASHA V RAJ (HOA995)\nΗ NO 18 KAUSHALYA 11TH ROAD\nVITTHAL NAGAR SOCIETY\nJVPD SCHEME JUHU, MUMBAI, 400049\nPan No: AADPR9260J\nSir/Madam,\nWe have this day done by your order and on your account the following transactions:\nContract Form A No. 0003970\nTrade Date: 06/09/2011\nTRADE NO TRD TIME SCRIP NAME PUR QTY BUY RATE BUY TOTAL BUY TOT BROK BUY VALUE SCRIPNAME SALE QTY SELL RATE SELL TOTAL SELL TOT BROK SELL VALUE QTY UNIT PRICE UNIT\nORDER NO\n141124900000091 104\n3:11PM\nCASTKAD13\n200 950.00 712500.00\n855.00 713355.00\n1 BAG\n20 KGS\n141124900000091 103\n3:11PM\nCASTKAD13\n300\n950.00 1068750.00\n1282.50 1070032.50\n1 DAG\n20 KGS\n141124900000093 112\n3:11PM\nCASTKAD13\n200\n950.00 712500.00\n655.00 713355.00\n1 BAG\n20 KGS\n141124900000093 111\n3:11PM\nCASTKAD13\n300\n950.00 1068750.00\n1282.50 1070032.50\n1 BAG\n20 KGS\n141124900000104 142\n3:11PM\nCASTKAD13\n300\n950.00 1068750.00\n1282.50 1070032.50\n1 BAG\n20 KGS\n141124900000104 143\n3:11PM\nCASTKAD13\n200\n950.00 712500.00\n855.00 713355.00\n1 BAG\n20 KGS\nNet Total\n1500\n5343750.00\n5350162.50\n141124900000096 124\n3:12PM\nCASTKAD136\n200\n972.40 729300.00\n875.16\n728424.84: BAG\n20 KGS\n141124900000096 123\n3:12PM\nCASTKAD136\n300\n972.40 1093950.00\n1312.74 1092637.26 1 BAG\n20 KGS\n141124900000108 149\n3:12PM\nCASTKAD136\n400\n972.40 1458600.00\n1750.32 1456849.68: BAG\n20 KGS\n141124900000108 148\n3:12PM\nCASTKAD136\n100\n972.40 364650.00\n437.58\n364212424\n20 KGS\n141124900000110 151\n3:13PM\nCASTKAD136\n400\n972.40 1458600.00\n1750.32 1456849.691 BAG\n20 KGS\n141124900000110 150\n3:13PM\nCASTRAL136\n100 972.40 364650.00\n437.58 364212.42 1 BAG\n20 KGS\nNet Total\n1500\n5469750.00\n5463186.30\nNet Obligation\n113,023.80\nTransaction Charges\n5,406.75\n1,893.44\nService Tax\n108.14\n105,615.47\nStamp Duty & Other Charge\nNet Amount.\nBrokerage has been charged as stated and has been at rates not exceeding the official scale of brokerage and indicated separately. This contract is made subject to the Terms and Conditions given overleaf, Rules, Bye-laws,\nBusiness Rules notices and directions of National Spot Exchange Ltd. Mumbai.\nPlace: Mumbai\nDate: 06/09/2011\nAUTHORISED SIGNATORIES:\nPRADEEP GUPTA/RAJESH BHOOTRA/ M.L. AGARWAL MAKETORA JAIN\nYours faithfully,\nFor ANAND RATHI COMMODITIES LIMITED\nASSOCI\nA1-20\nCONTRACT NOTE\nANAND RATHI COMMODITIES LIMITED.\n(Contract Notes issued by Members, acting for client as Agent)\n(Subject to exclusive jurisdiction of the courts in Mumbai only)\nMEMBER OF NATIONAL SPOT EXCHANGE LTD\nNSEL CODE NO:10570 DP ID: CM-BP ID:\nRegd. Off.: 4th Floor, Silver Metropolis, Jai Coach Compound, Opp. Bimbisar Nagar,\nGoregaon (E), Mumbai 400 063.\nTel.: +91 22 6698 3700 Fax: +91 22 6693 3770 E-mail: grievance@rathi.com\nCompliance Officer: Mr. Deepak Kedia. / Email: deepakkedia@rathi.com Tel No.: 40013700\nVisit us at: www.rathi.com\nDEALING OFFICE ADDRESS\nVICTORA-COMMODITY\nLOWER PAREL\nFax: OWN\nTo: ASHA V RAJ (HOA995)\nH NO 18 KAUSHALYA 11TH ROAD\nVITTHAL NAGAR SOCIETY\nJVPD SCHEME JUHU, MUMBAI, 400049\nPan No: AADPR9260J\nSir/Madam,\nWe have this day done by your order and on your account the following transactions:\nContract Form A No.: 0006387\nTrade Date: 02/11/2011\nTRADE NO TRD TIME SCRIP NAME PUR. QTY BUY RATE BUY TOTAL BUY TOT BROK SELL VALUE QTY UNIT PRICE UNIT\nORDER NO\n111130600000025 2722\n5:33PM\nPDY1121HR2\n3\n2400.00 1080000.00\n1296.00 1081296.00\n300 BAG 1 QTL\n111130600000026 2723\n5:33PM\nPDY1121HR2\n3\n2400.00 1080000.00\n1296.00 1081296.00\n300 BAG 1 QTL\n111130600000027 2724\n5:33PM PDY1121HR2\n3 2400.00 1080000.00\n1296.00 1081296.00\n300 BAG 1 QTL\n111130600000028 2727\n5:33PM\nPDY1121HR2\n3\n2400.00 1080000.00\n1296.00 1081296.00\n300 BAG 1 QTL\n111130600000029 2728\n5:34PM\nPDY1121HR2\n3\n2400.00 1080000.00\n1296.00 1081296.00\n300 BAG\n1 QTL\nNet Total\n15\n5400000.00\n5406480.00\n111130600000032 2733\n5:34PM\nPY1121MR25\n3\n2446.00 1100700.00\n1320.84 1099379.16\n300 BAG\n1 QTL\n111130600000033 2734\n5:34PM\nPY1121HR25\n3\n2446.00 1100700.00\n1320.84 1099379.16\n300 BAG\n1 QTL\n111130600000034 2735\n5:34PM\nFY1121HR25\n3\n2446.00 1100700.00\n1320.84 1099379.16\n300 BAG\n1 QTL\n111130600000035 2736\n5:34PM\nPY1121HR25\n3\n2446.00 1100700.00\n1320.84 1099379.16\n300 BAG\n1 QIL\n111130600000036 2737\n5:34PM\nPY1121HR25\n3\n2446.00 1100700.00\n1320.84 1099379.16\n300 BAG\n1 QIL\nNet Total\n15\n5503500.00\n5496895.80\nNet Obligation\n90,415.80\nTransaction Charges\n1,090.35\nService Tax\n1,459.98\n109.04\nStamp Duty & Other Charge\nNet Amount.\n87,756.44\nBrokerage has been charged as stated and has been at rates not exceeding the official scale of brokerage and indicated separately. This contract is made subject to the Terms and Conditions given overleaf, Rules, Bye-laws,\nBusiness Rules notices and directions of National Spot Exchange Ltd. Mumbai.\nPlace: Mumbai\nDate: 02/11/2011\nP\nAUTHORISED SIGNATORIES:\nPRADEEP GUPTA/RAJESH BHOOTRA/ M.L. AGARWAL/ NARENDRA JAIN\nMAHESH BANG\nYours faithfully,\nFor ANAND RATHI COMMODITIES LIMITED\n5.

2.

The purchase and sale transaction mentioned in the aforementioned\ncontract notes are part of the purchase and sales reflected in the profit and\nloss account of the assessee. Since all the details were furnished at the time\nof the original assessment proceedings, it cannot be said that there was any\nfailure on the part of the assessee to disclose truly and fully all material\nfacts relating to the assessment.\n6.\nSince the reopening is of more than four years from the end of the\nrelevant assessment year, first proviso to Section 147 of the Act, squarely\napplies, which read as under:-\n“Income escaping assessment.\n147. If the Assessing Officer has reason to believe that any income chargeable to tax has\nescaped assessment for any assessment year, he may, subject to the provisions of sections\n148 to 153, assess or reassess such income and also any other income chargeable to tax\nwhich has escaped assessment and which comes to his notice subsequently in the course\nof the proceedings under this section, or recompute the loss or the depreciation allowance\nor any other allowance, as the case may be, for the assessment year concerned (hereafter\nin this section and in sections 148 to 153 referred to as the relevant assessment year) :\nProvided that where an assessment under sub-section (3) of section 143 or this\nsection has been made for the relevant assessment year, no action shall be taken\nunder this section after the expiry of four years from the end of the\nrelevant assessment year, unless any income chargeable to tax has\nescaped assessment for such assessment year by reason of the failure on\nthe part of the assessee to make a return under section 139 or in response\nto a notice issued under sub-section (1) of\nsection 142 or section 148 or to disclose fully and truly all material facts\nnecessary for his assessment, for that assessment year:\nExplanation 1. — Production before the Assessing Officer of account books\nor other evidence from which material evidence could with due diligence\nhave been discovered by the Assessing Officer will not necessarily amount\nto disclosure within the meaning of the foregoing proviso.”\n[emphasis supplied]\"\n7.\nOn similar situation, the Hon'ble High Court of Bombay in the case\nof TAO Publishing (P.) Ltd. vs. DCIT [2015] 370 ITR 135 (Bombay) has interalia\nheld as under:-\n“10. As stated above, the reasons supplied to the Petitioner do not disclose that there was\nany failure on the part of the Petitioner to provide all the material facts. That being the\nposition, this ground could not have been taken up against the Petitioner at the time of\ndisposing of the objections. Once this was not the basis for issuance of notice for\nReassessment, it cannot be held against the Petitioner that the Petitioner had failed to\nmake a true and full disclosure. It will have to be held that the Petitioner did not fail to\nmake full and true disclosure of all material facts. The jurisdictional requirement for\ncarrying out the reassessment, after the expiry of period of four years, is not fulfilled in\nthe present case.\n11. The learned counsel for the Petitioner also submitted that, in fact, there was no failure\nto disclose all material facts as the Respondent No.1 had specifically sought details as\nregard the relevant expenditure and which were furnished. He relied upon the decision of\nthe Apex Court in the case of Gemini Leather Stores v. ITO [1975] 100 ITR 1, to contend\nthat the duty of the assessee was to place on record all the primary facts and drawing of\ninference from the primary facts is upto the Assessing Officer. However, this issue need\nnot be gone into in depth any further, as the Petitioner is entitled to succeed on the first\nground mentioned above.\n12. In the circumstances, the Petitioner is entitled to the reliefs prayed for in the Petition.\nIt will have to be held that the Respondent No.1 had no jurisdiction to proceed with the\nimpugned reassessment proceedings.”\nSimilarly, in the case of Sound Casting (P) Ltd. vs. DCIT [2012] 250 CTR\n119 (Bombay), the Hon'ble High Court of Bombay held as under:-\n8.\n“Held that the reopening of the assessment had admittedly taken place beyond a period\nof four years from the end of the relevant assessment year. There was no allegation in the\nreasons which had been disclosed to the assessee that there was any failure on his part to\nfully and truly disclosed material facts necessary for assessment for relevant assessment\nyear. Hence, the jurisdictional condition for reopening the assessment beyond a period of\nfour years had not been fulfilled. Even during the course of hearing, it had not been the\nsubmission of the revenue that there was any suppression of material facts on the part of\nthe assessee. Therefore, the impugned notice was to be set aside.\"\n9.\nIn another case of First Source Solutions Ltd. vs. ACIT in [2021] 438 ITR\n139 (Bombay), the Hon'ble Jurisdictional High Court, held as under:-\n“11. Therefore, when the assessment is sought to be reopened after the expiry of period of\nfour years from the end of the relevant year, the proviso to section 147 stipulates a\nrequirement that there must be a failure on the part of the assessee to disclose fully and\ntruly all material facts necessary for his assessment for that year. This stipulation does\nnot govern a notice for reopening within a period of four years. In the case at hand, as\nnoted earlier, there is not even a whisper about what fact was not disclosed. In our view,\ntherefore, the notice to reopen under section 148 of the said Act itself was issued without\njurisdiction. Consequently, the order passed also cannot be sustained.”\nConsidering the facts of the case in totality in light of the judicial\ndecisions discussed hereinabove (supra), we have no hesitation in setting\naside the impugned notice u/s 148 of the Act thereby quashing the\nresultant assessment order.\n10.\n11.\nFor the sake of completeness, we will now address the issues on\nmerits of the case. The AO at para 7 of his order has observed as under:-\n\"....it is seen that the assessee has carried out certain transaction on NSEL\nplatform through broker Anand Rathi Commodities Ltd wherein' total purchase is\nRs.1,07,43,750/- and sale is Rs.1,09,73,250/-. Accordingly, Show cause notice\ndated 15.12.2019 was issued to the assessee, asking the assessee as to why Rs.\n1,09,73,250/- being Sales amount, should not be added to the total income of the\nassessee for A.Y. 2012-13. In response to the same assessee made compliance on E\nfiling portal and vide letter dated 17.312.2019 submitted that she has not done any\nCCM and requested the proof of CCM and details of amount of Rs.1,09,73,250/-.\"\n12.\nFrom the above, it can be seen that the AO himself is saying that there\nwas contract for purchase of Rs.1,07,43,750/- and there was contract of sale\nfor Rs.1,09,73,250/-. Thus, only the profit element should have been added\nwhich has already been disclosed by the assessee in its profit and\nloss\naccount. Therefore, there is no income remaining for making the impugned\naddition. The AO has wrongly added the entire sales amount of\nRs.1,09,73,250/- without deducting the purchase amount of\nRs.1,07,43,750/-. Therefore, on merits of the case, the addition cannot be\nsustained. Accordingly, appeal of the assessee has to be allowed on both\ncounts.\n13.\nIn the result, appeal of the assessee is allowed.\nOrder pronounced in the Court on 20th March, 2025 at Mumbai.\nSd/-\n(SANDEEP SINGH KARHAIL)\nJUDICIAL MEMBER\nSd/-\n(NARENDRA KUMAR BILLAIYA)\nACCOUNTANT MEMBER\nMumbai, Dated 20/03/2025\n*SC SPS\nआदेश की प्रतिलिपि अग्रेषित/

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