NALINI R. MEHTA,MUMBAI vs. ACIT 19(2), MUMBAI

O R D E R

PER PAVAN KUMAR GADALE JM:

1. On the facts and circumstances of the case and in law Ld. CIT(A) erred in confirming dated 12.10.2017 passed by the A.O rejecting application of the appellant dated 21.01.2010 for rectification u/s 154 of the assessment order by the A.O 2. The Ld. CIT(A) erred in confirming action of the AO of rejecting application u/s 154 of the appellant filed in Ms. Nalini R. Mehta., Mumbai connection with original assessment order dated 26.12.2008 u/s 143(3) of the Act. 3. The Ld. CIT(A) ought to have directed the AO to rectify the original assessment order u/s 143(3) dated 26.12.2008 and further directed the AO to grant refund due to the appellant. 4. The appellant craves leave to add to, amend, alter the ground of appeal

or to submit additional ground if considered necessary.

2. The brief facts of the case are that the assessee is an individual and derives income from business, capital gains and other income. The assessee has filed the return of income for the A.Y 2006-07 on 31.10.2006 declaring a total income of Rs.1,07,50,684/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 143(2) of the Act was issued. The A.O found that the assessee has engaged in some speculation of shares and investments. The assessee has disclosed the speculation as a business income and assessee was called to submit the details as to why the short term capital gains(STCG) should not be treated as business income. The assessee has filed the explanations and relied on the judicial decisions.The A.O. considered the pattern of share transactions and CBDT circular and finally assessed the total income of Rs. 1,07,50,680/- and passed the order u/s 143(3) of the Act dated 26.12.2008. Subsequently, the assessee has filed an application Ms. Nalini R. Mehta., Mumbai U/Sec154 of the Act to consider the net short term gains of Rs.32,35,920/- which was erroneously reflected in the original return of income as Rs 58,89,835/-.The A.O. is of the view that the claim of the assessee cannot be accepted and observed that the assessee has not filed the revised return of income and hence the claim is rejected and passed the order U/sec154 of the Act dated 12-10- 2017.

3. Aggrieved by the order u/sec154 of the Act, the assessee has filed an appeal before the CIT(A) and the CIT(A) has confirmed the action of the A.O and dismissed the assessee appeal. Aggrieved by the order of the CIT(A) the assessee has filed an appeal before the Honble Tribunal. At the time of hearing, none appeared on behalf of the assessee. The Ld.DR supported the order of the CIT(A).

4. We heard the Ld.DR submissions and perused the material on record. Prima-facie the sole disputed issue is with respect to assessee’s claim that the net short term capital gains of Rs. 58,89,835/- mentioned in the original return of income should be substituted with Rs. 32,35,920/-. In the rectification proceedings under u/sec154 of the Act, the A.O has declined to accept the claim on the ground that the assessee has not made the Ms. Nalini R. Mehta., Mumbai claim in the revised return of income and rejected the application u/sec 154 of the Act. Therefore, we considering the overall facts and circumstances are of the opinion that the assessee cannot be denied the legitimate claim and are inclined to grant one more opportunity to the assessee to substantiate the claim with evidences. Accordingly, to meet the ends of justice and the principles of natural justice, we restore the entire disputed issue to the file of the A.O for limited purpose to verify and examine the claim and adjudicate on merits. The assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and allow the grounds of appeal of the assessee for statistical purpose.

6. In the result, the appeal filed by the assessee is allowed for statistical purposes.