MANOJ JAIN HUF,MUMBAI vs. INCOME TAX OFFICER WARD 42(1)(3), MUMBAI

On the facts and circumstances of the case and in law, the Ld. CIT(A), NFAC erred in confirming the addition u/s 68 of the Income Tax Act, 1961 of Rs. 29,19,330/-, being sale consideration received on sale of shares of M/s Swarnsarita Gems Limited, by holding the genuine transactions in respect of trading in the shares of M/s Swarnsarita Gems Limited as non-genuine.

On the facts and circumstances of the case and in law, the Ld. CIT(A), NFAC erred in holding that there was no violation of principles of natural justice as the Ld. Assessing Officer had not provided the appellant with any material/corroborative evidence to substantiate his case and not provided the opportunity to cross examine to the appellant while relying on a third-party statement.

On the facts and in the circumstances of the case and in law, the impugned assessment order is void ab initio as the order passed by the Ld. Assessing Officer dated 20.12.2016 does not bear any Document Identification Number (DIN) on its assessment order body as mandated by the Circular No. 19/2019 issued by the CBDT.

The appellant craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another. 2. As per the facts of the case during the year under consideration, assessee filed return of income declaring nil income. However, on the basis of information received by the AO from DDIT investigation that M/s. Swarnasarita

During the course of reassessment, the assessee submitted return of income, balance sheet, P&L account, audit report, computation of income, contract notes, etc and submitted that no LTCG has been claimed

Since AO was of the view that assessee is one of the beneficiary and trading in the above penny stock was manipulated affair to generate entries of bogus LTCG/STCG/business loss to facilitate tax evasion and thus called for more details, but assessee could not submit the same. Therefore AO completed the assessment by making additions u/s 68 of the Act.

Although appeal was filed by the assessee along with application for additional evidence, but Ld. CIT(A) while seeking the remand report, rejected the appeal on the pre- conceived notion that the trading transaction in respect of shares of M/s Swarnasarita Gems Ltd were bogus, as there is investigation report informing that the company is a penny stock.

After having heard the counsels for both the parties and perusal of the documents placed on record and the orders passed by the revenue authorities, we noticed that the revenue authorities have completely overlooked the various documents and supporting evidences submitted by the assessee. These documents have not been analysed and on the basis of preconceived notion additions were made on the basis of investigation carried on by the investigation agencies and eventually no verification was done on the various documents placed on record by the assessee. We observed from the record that assessee has purchased and sold the shares in question through recognised stock exchange and authorised brokers and nowhere it is brought on record that assessee is one of the party involved in the entry provider or involved in manipulating the prices or it is proved that assessee is one of the entry provider.

Be that, as it may, without commenting anything on merits, we are of the view that the interest of justice would be met only in case the matter is restored back to the file of AO with the direction to consider the various documents and supporting evidence submitted by the assessee and to call for any other documents, if so required and thereafter adjudicate the issues raised by the assessee on merits and 5 Manoj Jian HUF, Mumbai.

Before parting, we make it clear that our decision to restore the matter back to the file of the Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute which shall be adjudicated by the Ld.CIT(A) independently in accordance with law.

In the result the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 07.03.2025. (SANDEEP GOSAIN)

उप/सहायक पंजीकार ( Asst.