RAM AWATAR DHOOT,KOLKATA vs. I.T.O.,WARD-22(4), KOLKATA

The assessee challenges the validity of reopening of assessment u/s 147 of the Act.

I have heard rival contentions. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record and the case law cited, I hold as follows.

The reasons for reopening of the assessment as follows: “On perusal of the information received from the office of DDIT(Inv.)-Unit- 3(1), Kolkata and the return of income filed by you for A.Y. 2011-12, it is evident that during the F.Y. 2010-11 relevant to the A.Y. 2011-12, you had Assessment Year: 2011-12 Ram Awatar Dhoot purchased/sold through NMCE earning a profit of Rs. 2,30,400/-. You have not shown any income/loss on the above trading in your return of income. The platform of the NCME was used by you through the broker Jet Air Agencies Pvt. Ltd. (Broker Code No. – CL0146) for earning the above profit. As per information available with the Department, the aforesaid trading was pre-arranged in nature and there was a meeting of minds between the trading entities while conducting the said trade through NMCE”.

A perusal of the same demonstrates that there is a factual error in the reasons recorded. The assessee had received Rs. 2,97,469.97/- from Jet Air Agencies Pvt. Ltd. The amount of Rs. 2,30,400/- is part of this amount. Thus these transactions as well as the income therein was reflected in the accounts of the assessee as well as in the return of income filed by it.

It is factual incorrect to record in the reasons for reopening that income liable to tax as escaped assessment. The assessee had brought this factual inaccuracy to the notice of the Assessing Officer vide letter dated 23.08.2018. There is no reply by the AO to this letter. The objections were not disposed off. Non-disposal of objections to reopening of assessment render the assessment bad in law. Hence, the reopening is bad in law. Thus I quash the assessment order and allow the appeal of the assessee.