JARNAIL SINGH,BILASPUR vs. PRINCIPAL COMMISSIONER OF INCOME TAX-1, CHANDIGARH

Per contra, the Ld. CIT/DR submitted that there is a substantial delay in filing the present appeals and no reasonable cause has been shown explaining the delay so happened in filing the present appeals.

After hearing both the parties and considering the material available on the record, we find that the contents of the assessee’s affidavit have not been specifically rebutted by the Revenue. It is an admitted position that the assessee has engaged Shri Sanjay Mehra, C.A for the purpose of filing the present appeal and in his Affidavit, he has admitted that there was lapse on the part of one of his staff member, Shri Aniket Kumar wherein the appeal could not be filed within limitation period, at the same time, fee for filing of the appeal was deposited on 19/10/2022 within the stipulated limitation period. Further it is observed that the assessee has been regularly following with his Counsel and has been diligent enough in taking care of his tax matters and therefore on account of lapse on the part of the Counsel, the assessee cannot be penalized. We therefore find that assessee has submitted necessary explanation and the delay in filing the present appeal is sufficiently explained and the same is hereby condoned and the appeal of the assessee is admitted for adjudication.

Coming to the merits of the case, both the parties fairly submitted that the facts and circumstances of the case are identical in both the years. With the consent of both the parties, the case of the assessee in for A.Y 2011-12 was taken as a lead case wherein the assessee has taken the following grounds of appeal:

On the facts and circumstances of the case and in law, original assessment, having been made under full scrutiny under section 143(3), could not be subject matter of revision especially since no fault has been found in the assessment except for the Commissioner's inference that further verification was necessary as ordered by him.

That the appellant reserves its right to add, alter and modify the grounds of appeal as taken.”

The ld AR submitted that the additional ground is legal in nature and no fresh facts are to be investigated. He also submitted that the additional ground goes to the root of the matter and therefore, prayed that the same may be admitted for disposal of the appeal. He has relied upon the decision of Hon’ble Supreme Court in the case of NTPC Limited vs. CIT reported in 229 ITR 383 (SC).

The ld CIT/DR objected to the admission of additional grounds of appeal.

Subsequently, the assessment records were examined by the ld. PCIT, Shimla and a show cause dt. 20/02/2021 was issued to the assessee. In the show-cause so issued, it was stated that during the FY 2010-11 relevant to AY 2011-12, Sh. Jarnail Singh made share transactions amounting to Rs. 8,29,99,66,819/-, thereafter, the case was reopened u/s 147 of the Income Tax Act 1961 and notice under section 148 of the I.T. Act was issued to the assessee for the A.Y. 2011-12 on 28.03.2018. In response to the said notice, the assessee e- filed his return of income on 24-08-2018 at income of Rs. 156,000/-. In his return of income, the assessee declared income of Rs. 1,56,000/- under head 'Salary and declared loss of Rs.83,14,686/- under the head “Short Term Capital Gain”. The assessment order under section 143(3) r.w.s. 147 of the I.T. Act was passed on 16.11.2018 and income of the assessee was assessed at Rs. 3,48,000/-.

It has been further stated in the show-cause notice that on perusal of the bank account statements of HDFC Bank (A/c No. XXXXXXX) furnished by the assessee during the assessment proceedings, it is noted that there are total credit entries in this bank account to the tune of Rs. 3,88,24,403/- Further, it is also noted from the transaction pattern that the bank accounts were used for business transactions or for providing accommodation entries. However, no business income is declared in the ITR filed by the assessee. Even, no query was made on these transactions. Thus, the AO has failed to verify and examine this issue at the time of completion of assessment proceedings.

It has been further stated in the show-cause that as per ITS detail, the assessee has made transaction of Rs. 8,29,99,66,819/- in penny stock during the year under consideration, whereas the assessee had shown loss of Rs. 83,14,686/- and no further enquiry was made by the AO. Thus, the AO has failed to verify and examine this issue at the time of completion of assessment proceedings.

It has been further stated in the show-cause notice that on perusal of certificate issued by the Jhanduta Agriculture Co-operative Service Society placed on the record, the assessee has deposited cash of Rs 3,05,000/- in the society but no enquiry regarding source of this cash deposit was made during assessment proceedings. Hence, the same remained unverified. Thus, the AO has failed to verify and examine this issue at the time of completion of assessment proceedings.

In view of the facts stated above, the ld PCIT noted that there has been omission on the part of the A.O. to investigate the issue as mentioned in above para(s) and the order thus passed by the A.O. without making inquiries or verification which should have been made [explanation 2(a) of section 263(1) of the Income Tax Act, 1961], the order passed by the Assessing officer is erroneous in so far as it is prejudicial to the interest of the Revenue.

In response to the show cause, the assessee filed his submissions and thereafter, taking into consideration the submissions so filed but not finding the same acceptable, the Ld. PCIT recorded her satisfaction stating that the assessment order passed by the AO is not only erroneous but also prejudicial to the interest of the Revenue and has been passed without making proper inquiries either from the assessee or from the third party to confirm the reality of the investment actually claimed to have been made by the assessee on the basis of which the deduction has been claimed and therefore the order so passed by the AO dt. 16/11/2018 was set aside to the file of the AO to pass fresh order after making necessary inquiries / investigation in light of discussion made in the impugned order and after giving due opportunity to the assessee.

Against the said findings and the direction of the Ld. PCIT, the assessee is in appeal before us.

During the course of hearing, the ld AR submitted that the case of the assessee was reopened by issue of notice under section 148 on 28th of March 2018. It was submitted that the reason for reopening was that the assessee had made transactions in commodity trading of Rs. 8,29,99,66,819/- and penny scrips of Rs. 1,92,325/-. During the course of assessment proceedings, the assessee explanation were called in relation to commodity trading transactions vide notice dated 13/09/2018. In response, the assessee appeared before the AO and he explained that he was working as an employee with Sunglow Capital Services Limited and his HDFC bank account was used by Sunglow Capital Services Limited to receive and deploy funds for commodity trading on behalf of its various clients as evident from receipts and transfer entries in the bank statement and copy of the bank account statement was submitted vide submission dated 19/09/2018 along other details as sought by the AO. The assessee also submitted commodity wise transaction report so provided by his employer to justify and corroborate the claim of loss during the course of the assessment proceedings vide submissions dated 25th of October 2018 where in details of commodity wise profit and loss account was submitted. Thereafter, another notice dated 25th of October 2018 was issued by the Assessing officer wherein the issue in respect of cash deposited in the bank account as well as trading in penny scrips was inquired from the assessee. The assessee submitted pointwise reply dated 30th of October 2018 in respect of the queries raised by the Assessing officer. The Assessing officer, thereafter, after due examination and verification of the explanation so submitted by the assessee as corroborated by the bank statement and commodity wise transaction report and after due application of mind, didn’t allow loss claimed by the assessee on commodity trading transactions apparently for the reason that the commodity trading transactions were undertaken by Sunglow capital Services on behalf of its clients using the bank account of the assessee and as a result, loss wrongly claimed by the assessee on the commodity trading transactions was disallowed and assessed income was determined at Rs. 3,48,000/- after making an addition of Rs.1,92,000/- on account of investment made in penny scrips.

It was submitted that the assessee filed a reply along with annexures to the show cause notice issued under section 263 which is placed in the paper book at Pages 20-33. It was explained to the ld PCIT that the assessee was working with M/s Sunglow Capital Services and his bank account has been utilized for trading in commodity by Sunglow Capital Services wherein the amount credited in the bank account to the tune of Rs 3,88,24,403/- is received from Sunglow Capital Services and its clients for trading from time to time and amount of Rs 3,84,89,005/- is transferred to the commodity broker, Sunglow Commodity from time to time and he doesn’t hold any penny out of this account and the details of bank transactions along with copy of bank statement were submitted before the ld PCIT. It was submitted that the AO has rightly disallowed the loss claimed on account of commodity trading as the same doesn’t belong to the assessee and belong to the clients of Sunglow Capital Services and thus, there was no error in the order so passed by the AO. It was submitted that the ld PCIT however failed to appreciate the submissions and documentation so submitted by the assessee and the assessment order so passed by the AO was set-aside vide the impugned order u/s 263 of the Act.

It was submitted that when the reasons recorded for reopening the assessment were the very same reasons for which notice u/s 263 of the Act, then invocation of section 263 of the Act is not tenable. Since the issue has been duly examined by the AO after issuance of notice u/s 148, the same cannot be again looked into in proceedings u/s 263 in as much as the approval for re- opening has also been given by Principal Commissioner of Income Tax. In support of the said proposition, reliance was placed on the decision of the Hon’ble Delhi High Court in case of CIT vs. Suresh Paul Bansal 2 taxmann.com 260 (Del.)

It was further submitted that the ld PCIT has stated that there were total credit entries in the bank account of Rs. 3,88,24,403/- and the transaction patterns that the bank accounts were used for business transactions or for providing accommodation entries. In this regard, it was submitted that there is not an iota of evidence on record that the assessee was providing accommodation entries. It was submitted that the transactions in terms of credit and corresponding debits/transfer entries relates to commodity trading transactions undertaken by his employer along with its associated entity on behalf of their clients, that the money has been received from the clients and thereafter deployed for commodity trading by the employer entity along with its associated entity and once the assessee has explained both the credit and debit entries, the onus cast on him is duly discharged and which has been duly appreciated by the AO, however, the ld PCIT has failed to appreciate the same.

It was further submitted that the ld PCIT has stated that as per ITS detail, the assessee had made transactions of Rs. 8,29,99,66,819/- in penny stock. In this regard, it was submitted that the assessee did not deal in penny stocks but there were transactions of trading on the commodity exchange which has been undertaken by his employer which has resulting in overall loss as per the commodity wise statements placed on record during assessment proceedings as well as proceedings before the PCIT. It was submitted that this fact has not been rebutted and where the net result in commodity trading is a loss and which has been denied by the AO holding that such loss doesn’t belong to the assessee, how the order so passed by the AO has been held as erroneous and prejudicial to the interest of the Revenue which has not been spelt out by the ld PCIT.

It was further submitted that as per the ld PCIT, the AO failed to verify and examine the issues. It is submitted that it is not a case of no enquiry by the AO as demonstrated earlier wherein the AO has carried out necessary enquiry and verification and after due application of mind, has passed the assessment order u/s 147 r/w 143(3) of the Act. Further, no inquiry was undertaken by the PCIT on her own during the course of proceedings under section 263. The explanations rendered have not been rebutted by the ld PCIT. For the purposes of exercising jurisdiction under section 263 of the Act, the conclusion that the order of the Assessing officer is erroneous and prejudicial to the interest of revenue has to be preceded by inquiry. If the Principal Commissioner of Income Tax is of the view that the Assessing officer did not undertake inquiry, it becomes incumbent on the ld PCIT to conduct such enquiry and in support of the said proposition, reliance was placed on the following decisions: • PCIT vs. Delhi Airport Metro Express (P.) Ltd. 398 ITR 8 (Delhi) • ITO vs. D.G. Housing Projects Ltd. 343 ITR 329 (Delhi) • Director of Income Tax Vs. Jyoti Foundation 357 ITR 388 (Delhi)

It was further submitted that the application of mind of the AO is evident from the assessment order passed u/s 147 read with 143(3). It depicts that in respect of the major issue for which the case was re-opened i.e transactions in commodity trading, proper inquiry was made by the Assessing officer during the course of assessment proceedings in this regard. It was submitted that the ld PCIT is basically trying to substitute the plausible view with her own view without making any enquiries at her end. In any case, it is a trite law that insufficient enquiry by the Assessing officer does not entitle invocation of revisional power and in support thereof, reliance was placed on the following judgments: • CIT vs. Anil Kumar Sharma 335 ITR 83 (Del HC) • CIT vs. Hindustan Marketing and Advertising Co. Ltd. 341 ITR 180 (Del HC) • Hari Iron Trading Co. vs. CIT (2003) 263 ITR 437 (P & H)

It was further submitted that on perusal of the order passed under section 263, the PCIT mentions in para 4.6 that the assessee had sold the penny stock of M/s Global Capital Markets Limited. She further mentions in para 4.7 that as per information available, the assessee had purchased shares of M/s Bhilwara Technical Textiles Limited of Rs. 2,87,500/- and M/s OK Play India limited for Rs.15,08,175/-. It was submitted that these matters were neither part of the initial show-cause notice nor any query was put to the assessee during the course of revisionary proceedings and in any case, no inquiry in this regard was made by the PCIT of her own.

In light of aforesaid submissions, it was submitted that the order so passed by the ld PCIT be set-aside and that of the AO passed u/s 147 r/w 143(3) be sustained.

Per contra, the Ld. CIT/DR has vehemently argued the matter and submitted that firstly, the contention of the ld AR that merely because the case of the assessee was reopened u/s 147, the ld PCIT has no power to invoke his jurisdiction u/s 263 is a fallacious proposition and which cannot be accepted. It was submitted that it depends upon the facts and circumstances of each case and there could be situations where the AO has failed to properly verify the matter/issue for which the case of the assessee was reopened and in such a situation, the ld PCIT has the requisite jurisdiction u/s 263 of the Act.

Further, the ld CIT/DR has relied on the findings of the Ld. PCIT and our reference was drawn to the Para 4 of the impugned order contents of which read as under:

We have heard the rival contentions and purused the material available on record. In the show-cause issued u/s 263 dated 20/02/2021, the ld PCIT has listed down three issues and has held that there has been an omission on the part of the A.O to investigate the said issues and the order passed by the A.O. u/s 147 r/w 143(3) dated 16/11/2018 is erroneous in so far as it is prejudicial to the interest of the Revenue as the same has been passed without making inquiries or verification which should have been made and explanation 2(a) of section 263(1) of the Income Tax Act, 1961 has been invoked by the ld PCIT for exercise of her jurisdiction u/s 263 of the Act.

The issues which have been listed in the show-cause so issued by the ld PCIT relates to transactions in the bank account maintained by the assessee with HDFC Bank wherein there were credit entries of Rs 3,88,24,403/-, the transactions relating to penny stock amounting to Rs 8,29,99,66,819/- and in respect of which the assessee has claimed loss of Rs 83,14,686/-, and cash deposits of Rs 3,05,000/- with Jhanduta Agriculture Co-operative Service Society.

In response to the show-cause, the assessee filed his submissions and thereafter, taking into consideration the submissions so filed but not finding the same acceptable, the Ld. PCIT recorded her satisfaction in paragraph 6 of the impugned order wherein she has held as under:

We therefore find that there is a total disconnect between the contents of the show-cause notice and the final satisfaction so recorded by the ld PCIT. The issues which have been raised in the show-cause as we have noted supra and the satisfaction so recorded by the ld PCIT while finally setting aside the assessment order are totally different and have no connection with each other. Further, as rightly pointed out by the ld AR during the course of hearing and which the ld CIT/DR couldn’t rebut except stating that the same appears to be a clerical mistake, we find that there is nothing on record either as part of the assessment records or the impugned order that the assessee has made any investments and which have been claimed as deduction while filing the return of income for the impugned assessment year and which has not been examined by the Assessing officer. Therefore, we find that the satisfaction so recorded by the ld PCIT reflects a mechanical and non-judicious approach on her part and which has even no bearing on the facts of the present case and the same is clearly arbitrary and on this ground itself, the consequent direction of the ld PCIT of the setting aside the assessment order passed u/s 147 r/w 143(3) deserve to be set-aside.

Now, coming back to the issues which have been listed in the show-cause so issued by the ld PCIT and the findings recorded in relation thereto in paragraph 4 to 4.3 of the impugned order as so referred by the ld CIT/DR. The same relates to transactions in the bank account maintained by the assessee with HDFC Bank wherein there were credit entries of Rs 3,88,24,403/-, and the transactions relating to penny stock amounting to Rs 8,29,99,66,819/- in respect of which the assessee has claimed loss of Rs 83,14,686/- while filing the return of income in response to notice u/s 148 of the Act.

In this regard, with the assistance of the ld AR, we have gone through the material available on record during the course of hearing. We find that during the financial year relevant to the impugned assessment year, the assessee was working as an employee of M/s Sunglow Capital Services Limited, New Delhi and the said company was engaged in commodity trading business on behalf of its various customers through its associate company, M/s Sunglow Commodity Pvt Ltd which is a member of Multi Commodity Exchange of India Ltd. It is further noted that basis information that the assessee has undertaken transaction in commodity trading amounting to Rs. 8,29,99,66,819/-, reasons for escapement of income were recorded by ITO, Bilaspur and notice under Section 148 was issued on 28/03/2018 after receiving necessary approval from the ld PCIT, Shimla. In response to the notice so issued, the assessee filed his return of income declaring salary income of Rs 1,56,000/- from M/s Sunglow Capital Services Limited, New Delhi and claimed loss of Rs 83,14,686/- under the head “short term capital gains”. During the course of assessment proceedings, the AO issued notices and called for the assessee’s explanation and documentation to substantiate the commodity trading transactions and claim of loss of Rs 83,14,686/-. In response, the assessee submitted that he is an employee of M/s Sunglow Capital Services Limited and his current bank account maintained with the HDFC bank was used by M/s Sunglow Capital Services Limited to receive and deploy funds for commodity trading on behalf of its various clients as evident from receipts and transfer entries in the bank statement and copy of the bank account statement was submitted. The assessee also submitted commodity wise transaction report so provided by his employer to justify and corroborate the claim of loss during the course of the assessment proceedings. The Assessing officer thereafter examined the submissions/explanation and the documentation so submitted by the assessee and the claim of loss of Rs 83,14,686/- in respect of commodity trading transactions as so claimed by the assessee in his return of income was not allowed. In effect, the AO held that the commodity transactions so undertaken in name of the assessee (reason for reopening the case u/s 147) and utilizing his HDFC bank account for routing the funds and transactions in the bank account didn’t belong to the assessee and consequentially, the loss so claimed in respect of such commodity transaction doesn’t belong to the assessee and the assessee was held not eligible for claiming such loss and the same was denied. The factum of not allowing the loss so claimed by the assessee cannot by any stretch of imagination be held as prejudicial to the interest of the Revenue.

Further, where the reason for which the case of the assessee was reopened u/s 147 and during the assessment proceedings, the AO after calling for the explanation and documentation and having satisfied himself that the commodity trading transactions didn’t belong to the assessee but belong to the various clients of his employer and its associate entity, didn’t draw any adverse inference in respect of commodity trading transactions and corresponding entries in the HDFC bank account for routing the funds for such trading, the order so passed by the AO cannot be held to be an erroneous order.

We have also gone through the HDFC bank account statement of the assessee placed at pages 26-30 of the assessee’s paperbook and find that majority of the transactions in respect of receipt of funds and subsequent transfer entries are through banking channels and are between two entities, namely Sunglow Capital, the employer entity and Sunglow Commodity, the trading entity having membership of MCX. There are total credits of Rs. 3,88,24,403/- and total debits/transfer entries of Rs 3,84,89,005/- leaving a minuscule balance at the year end and we could see a clear pattern/nexus between the amount credited and amount debited on the same day/next day between these two entities. The bank accounts from where the funds have been received and the bank accounts where the funds have been transferred are in name of these entities, namely Sunglow Capital and Sunglow Commodity and these two entities have confirmed that the bank accounts belong to them and their confirmation has been placed on record. We therefore find that in the facts and circumstances of the case, the same corroborates the assessee’s explanation that his bank account has been utilized by his employer entity for carrying out commodity trading transactions on behalf of their clients and the AO has thus carried out the requisite enquiry and verification and has taken a plausible view by accepting the assessee’s explanation that the commodity trading transactions were undertaken in his name by his employer along with its associate entity utilizing his bank account and such a view cannot be held as erroneous and prejudicial to the interest of the Revenue. It is therefore not a case where no evidence is on record and no verification/examination has been carried out by the AO during the assessment proceedings as so held by the ld PCIT. Therefore, the findings of the ld PCIT that the AO has failed to verify the transactions in the bank account maintained by the assessee with HDFC Bank and the transactions relating to commodity trading is not borne out of records and the same deserve to be set-aside.

At this stage, it will be relevant to refer to the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Sunbeam Auto Ltd (supra) wherein the Hon'ble High Court has held that one has to keep in mind the distinction between 'lack of inquiry' and 'inadequate inquiry' and further if there was any inquiry, even inadequate, that would not by itself give occasion to the Commissioner to pass orders u/s 263 of the Act, merely because he has a different opinion in the matter. It was further held by the Hon'ble Delhi High Court that if any Assessing officer, acting in accordance with law, makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately.

Similar were the observation of the Hon'ble Delhi High Court in the case of ITO Vs. DG Housing Projects Ltd (supra). In this case, the Hon'ble Delhi High Court went on to observe that in case where there is in-adequate inquiry but no lack of inquiry, the CIT must give and record a finding that the order / enquiry made is erroneous and that this can happen only if an inquiry and verification is conducted by the CIT. The Hon'ble Delhi High Court in the case of ITO Vs. DG Housing Projects Ltd (supra) also held that in most cases of alleged 'inadequate inquires' it will be difficult to hold that the order of the Assessing officer, who had conducted enquiries and had acted as a Investigator, is erroneous, without the CIT conducting verification /inquiry himself. However, in the present case, we find that no such inquiry has been carried out by the Ld. PCIT and he has simply directed the Assessing officer to carry out detailed inquires. In our considered opinion, the Ld. PCIT, without making further inquiry on her own account, has simply stated in the impugned order that the Assessing officer was required to make more inquiries. The Ld. PCIT has not pointed out as to what further inquiry was the Assessing officer required to make and as to how without those inquires the order of the Assessing officer was erroneous in so far as prejudicial to the interest of the Revenue. As per the provisions of section 263(1) of the Act, after getting the explanation of the assessee to the show cause notice, the Ld. PCIT is supposed to examine the contention of the assessee and before passing an order cancelling the assessment, she is supposed to conduct an inquiry or cause to make such an inquiry, as he deems fit / necessary which has apparently not happened in the instant case.

As far as the invocation by the Ld. PCIT of Explanation 2(a) to section 263 of the Act is concerned, the Delhi Benches of the Tribunal had an occasion to consider this aspect in the case of Amira Pure Foods Pvt. Ltd Vs. Principal CIT (2017) 51 CCH 0473 (Delhi- Tribunal) wherein, the Delhi Benches, while relying upon the judgement of the Hon'ble Delhi High Court in the case of PCIT Vs. Delhi Airport Metro Express Pvt Ltd (ITA No. 705/2017) has held that Explanation 2 cannot be stated to have overridden the law as interpreted by various High Courts, where the High Courts have held that before reaching the conclusion that the order of the Assessing officer is erroneous and prejudicial to the interest of Revenue, the Commissioner himself has to undertake some enquiry to establish that the assessment order is erroneous and prejudicial to the interest of Revenue. Similarly, the Coordinate Mumbai Benches in the case of Narayan Tatu Rane reported in TS-290-ITAT 2016 (Mumbai) has held that Explanation 2 to section 263 does not provide unfettered right to the ld PCIT to revise each and every order. It was held in the said case that it is the responsibility of the ld PCIT to show that the enquiry or verification conducted by the Assessing officer was not in accordance with the enquires or verification that would have been carried out by a prudent officer and the relevant findings therein read as under:

In the entirety of facts and circumstances of the case, it is our considered opinion that the Assessing officer, after duly calling for required information and after duly considering the explanations and evidences before him, reached a rightful conclusion that the commodity trading transactions on MCX and related entries in the bank account, though in name of the assessee, were carried out by Sunglow Capital Services along with his associated entity Sunglow Commodity on behalf of their clients and doesn’t belong to the assessee. In our view, such a view is clearly a plausible view which a reasonable and prudent officer could have taken and in absence of any further enquiry conducted by the ld PCIT, the view so taken and order so passed in consequence thereof cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue and the exercise of revisional jurisdiction by the Ld. PCIT on these issues is therefore without any justification and the same is hereby set-aside.

Now, coming to the other issue stated in the show-cause relating to cash deposits of Rs 3,05,000/- with Jhanduta Agriculture Co-operative Service Society, we find that there is nothing on record that the AO has enquired and carry out verification of source of cash deposit during the course of assessment proceedings and therefore, we agree with the findings of the ld PCIT in para 4.4 of the impugned order that in absence of carrying out the verification of source of cash deposit, it is clearly a case of no enquiry and the AO should have verified the source of such deposits during the course of assessment order and having failed to do so, the order so passed by the AO is erroneous in so far as prejudicial to the interest of Revenue.

Now, coming to the other three issues stated by the ld PCIT in para 4.5, 4.6 and 4.7 of the impugned order which relates to cash deposit of Rs 3,30,000/- in the saving bank account maintained with UCO Bank, Bilaspur, sale of shares of M/s Global Capital Market Limited and purchase of shares of M/s Bhilwara Technical Textiles Limited and M/s Okay Play India Ltd, we find that the said issues were not part of the initial show-cause notice so issued by the ld PCIT and even during the course of revisionary proceedings, the assessee was never confronted with the said issues and his explanation sought in this regard. In view of the same, where the assessee has not been provided an adequate opportunity to put forth his explanation and submissions in relation to these transactions, the order so passed by the ld PCIT deserve to be set-aside.

In light of the aforesaid discussion, we hereby sustained the order of the ld PCIT in so far as and limited to issue of cash deposits of Rs 3,05,000/- with Jhanduta Agriculture Co-operative Service Society as discussed in para 4.4 of the impugned order in respect of which the AO shall carry out the necessary verification and examination. In respect of rest all matters discussed in the impugned order, we hereby set-aside the findings of the ld PCIT and the appeal of the assessee is thus partly allowed. pertaining to Assessment Year 2012-13, both the parties fairly submitted that the facts and circumstances of the case are exactly identical relating to commodity trading transactions and related entries in terms of movement of funds in HDFC bank account and similar contentions as raised aforesaid in may be considered. In light of submissions made by both the parties, our findings and directions contained in ITA No. 394/CHD/2023 shall apply mutatis mutandis to this matter.

In the result, both the appeals of the assessee are disposed off in light of aforesaid directions.