ITO-WD-1(2)(1), AHMEDABAD, AHMEDABAD vs. DARSHIT VIJAYSINHBHAI SHETH, AHMEDABAD
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR
PER: DR. BRR KUMAR, VICE PRESIDENT:
The captioned appeal has been filed by the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals), National
Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short) dated 06.11.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2012-13. 2. The Revenue has taken the following grounds of appeal:-
`Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the addition Asst.Year –2012-13 - 2– of Rs.13,56,587/- on account of unexplained business income u/s.68 of the Act and addition of Rs.3,34,967/- on account of unexplained expenditure u/s.69 of the Act, without appreciating the facts of the case.?
Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in ignoring the facts that the assessee has transacted in the scrip of scan Steels Ltd. which have been used by different share brokers for providing bogus LTCG by creating artificial market and price manipulation, and assessee was one of the beneficiaries.
In this case, the assessee, who is an individual, filed his return of income for the year under consideration on 27.09.2012 declaring total income at Rs.3,65,850/- and the assessment u/s 143(3) of the Act was passed on 28.12.2013. Subsequently, the assessee’s case was reopened u/s 147 of the Act by the Assessing Officer on the ground that the assessee had failed to furnish full and true details of his share trading transactions made in Scan Steels Ltd during the assessment proceedings due to which income to the extent of Rs.13,56,587/- has escaped assessment. The Assessing Officer thereafter completed assessment u/s 143(3) r.w.s. 147 of the Act on 28.11.2019, making addition of Rs.13,56,587/- on account of unexplained cash credit u/s 68 of the Act and Rs.3,34,967/- on account of unexplained expenditure u/s 69 of the Act.
Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who deleted both the additions made by the Assessing Officer. Asst.Year –2012-13 - 3– 5. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 6. We have heard the rival contentions and perused the material available on record. With regard to the addition of Rs.13,56,587/- made by the Assessing Officer, the Ld. CIT(A) held that the Assessing Officer had not analysed the transaction in Scan Steel Limited and had not even given the details of gain/loss from these transactions in the assessment order. The Ld. CIT(A) also held that the assessee had explained the transaction in Scan Steel Limited as tabulated below:-
Sr.
No.
Nos.
Purchase/Loss
Sale/Profit
Profit/
Loss
Mode
Date
Amount
Date
Amount
(1)
2000
22/06/2011
273279
23/06/2022
277645
4366
Delivery
(2)
200
24/06/2011
31347
27/06/2011
31952
605
Delivery
(3)
21/06/2011
34232
22/06/2022
1725
(32507)
Speculation
The Ld. CIT(A) clearly and factually held that the assessee had purchased shares of Scan Steel Limited on 22.06.2011 and sold on 23.06.2011, and further shares were purchased on 24.06.2011 and sold on 27.06.2011. The Ld. CIT(A) also observed, pointing out from the above, that the assessee had indeed done trading in shares and such transactions could not be treated as sham transactions. Ld.
CIT(A) also held that the assessee declared the sale and purchase transactions as his turnover. The Assessing Officer had considered the sale and purchase of these so-called speculative transactions as Asst.Year –2012-13
- 4–
turnover instead of net profit or loss and made the addition solely relying on the investigation report and did not carry out any independent investigation on the matter so as to substantiate his findings. We, therefore, do not find any infirmity in the order of the Ld. CIT(A) on this issue and this ground of Revenue is thus dismissed.
7. With regard to the addition made by the Assessing Officer u/s 69 of the Act on account of credit card expenditure of Rs.3,34,967/-, the assessee had submitted ledger account of credit card statement before the Ld. CIT(A) as Exhibit 12, which has been made a part of the order of the Ld. CIT(A) at page No. 5, based on which, Ld. CIT(A) deleted the said addition holding that the assessee had explained the source of payment of credit card expenses. We, therefore, see no infirmity in the order of the Ld. CIT(A) which is upheld.
8. In the result, the appeal of the Revenue is dismissed.
This Order pronounced in Open Court on 10.03.2025 (DR. BRR KUMAR)
VICE PRESIDENT
Ahmedabad; Dated 10.03.2025
**btkITA No.2095/Ahd/2024
Asst.Year –2012-13
- 5–
आदेश क त ल प अे षत/Copy of the Order forwarded to :
अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबंधत आयकर आयुत / Concerned CIT 4. आयकर आयुत(अपील) / The CIT(A)- 5. वभागीय त नध, आयकर अपील!य अधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशानुसार/ BY ORDER,उप/सहायक पंजीकार (Dy./Asstt.