DINESH KUMAR RAMUKA,KOLKATA vs. ITO, WARD-37(1), KOLKATA

The only issue raised by the assessee during the course of hearing was with respect to invalid reopening of assessment u/s 147 read with section 148 of the Act and prayed that the assessment framed u/s 147 read with section 144B of the Act dated 30.03.2022 deserved to be quashed.

The facts in brief are that the assessee filed the return of income on 10.01.2016, declaring total income of ₹6,17,260/-, which was processed u/s 143(1) of the Act on 21.04.2016. The case of the assessee was reopened u/s 147 of the Act based on the information gathered by the department under ‘Project Falcon’ from DGIT, Mumbai. As per the information the assessee had obtained and benefitted from engaging in reversal trades in lliquid stock options on Bombay Stock Exchange resulting in non-genuine/ bogus profit of ₹4,99,000/- and has also incurred commission expenses of ₹30,610/- in cash for availing non-genuine profit.

After hearing the rival contentions and perusing the materials available on record, including the reasons cited before us, a copy of which available at page no. 16 and 17 of the paper book which state that the assessee had purchased stock option for aggregate premium value amounting to ₹12,81,000/- and sold the same for aggregate premium value of ₹17,80,000/- resulting into a profit of ₹4,99,000/- and accordingly, the income of the assessee has escaped assessment. Though the assessee did not appear before either of the authorities below i.e. the ld. AO as well as the ld. Commissioner of Income-tax (Appeals), however, considering the smallness of amount I deem it fit not to refer the matter to any of the lower authorities as it would involve unnecessary wastage of time and manpower of the department. This being an open and shut case and is being adjudicated at this forum itself. We note from the profit and loss account that assessee has fully disclosed profit in commodity dealing of ₹4,96,401.97 in the revenue side of the profit and loss account and also in the computation of total income which is in agreement with the return filed for the instant assessment year. Therefore, the very foundation of the reopening of the assessment fails as income as noted by the ld. AO in the reasons to believe stood assessed to tax in the return itself. Accordingly, we quash the reopening of proceeding and also consequent order. The appeal of the assessee is allowed.

In the result, the appeal of the assesseeis allowed