AJITKUMAR CHANDMAL DAWDA,MUMBAI vs. ITO - 16(2)(1), MUMBAI

PDF · subscribers
ITA 6467/MUM/2018Status: DisposedITAT Mumbai12 December 2019AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the alleged loss was actually a profit earned by the assessee in the F&O segment, and the Assessing Officer and CIT(A) had misread the transactions. Therefore, the addition made by the Assessing Officer was deleted.

What were the facts?

Reassessment proceedings were initiated based on information suggesting fictitious loss claimed by the assessee on Future & Options trading. The Assessing Officer made an addition of Rs. 2,35,285/- on account of this alleged artificial loss.

What were the issues?

Whether the addition made on account of alleged fictitious loss in F&O trading was justified, given that the transactions actually resulted in a profit.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI R.C.SHARMA & SHRI VIKAS AWASTHY

For Appellant: Shri Dharmesh Shah
For Respondent: Shri Kumar Padampani Bora
Hearing: 10/12/2019Pronounced: 12/12/2019

This appeal by the assessee is directed against the order of Commission of Income Tax (Appeal)-5, (in short “the CIT(A)) Mumbai dated 29/06/2018 for assessment year 2010-11.

2.

Shri Dharmesh Shah appearing on behalf of the assessee submitted that reassessment proceedings were initiated under section 147 r.w.s 148 of the Income Tax Act, 1961(in short “the Act”) on the basis of information received from DDIT(Inv) with regard to alleged fictitious loss claimed by the assessee on trading of Future & Options(in short ‘F&O’). The Ld. Authorized Representative of the assessee pointed that a perusal of the assessment order dated 29/12/2016 passed under section 143(3) r.w.s. 147 of the Act would show that the alleged loss of Rs.2,35,286/- on Future & Option trading is in fact profit and not loss as claimed by the Department. Therefore, the addition of Rs.2,35,285/- made by the Assessing Officer on account of artificial loss in F&O segment is unwarranted.

The ld. Authorized Representative of the assessee made an alternate submission that even if it was a loss, the difference was less than 5%, under such circumstances, no addition is warranted. To support his contention, the ld. Authorized Representative of the assessee placed reliance on the decision of Jaipur Bench of the Tribunal in in the case of Sandeep Sharma vs. ITO decided on 21/05/2019. To further substantiate his contentions, the ld. Authorized Representative of the assessee has filed a certificate from M/s. Anant Investments, a Broker, through whom transactions were made, wherein he has certified that during financial year 2009-10 the value of transactions where client codes were modified were less than 5% of the total value of trade executed by the assessee through him.

3.

Shri Bora representing the Department Kumar Padampani vehemently defended the impugned order and prayed for dismissing the appeal of the assessee.

4.

Both sides heard and orders of authorities below were perused. The Assessing Officer in para 3.1 of the assessment order has tabulated the transactions, wherein the assessee has allegedly claimed artificial loss of Rs.2,35,286/- in connivance with broker M/s. Anant Investments. A perusal of the table reveals that it is not a loss of Rs.2,35,286/-, in fact it is a positive income, which assessee has earned in F&O segment. Apparently, the Assessing Officer has misread the transactions. Similar error has been committed by the CIT(A) while interpreting the transactions. We find merit in the contention of the assessee. The addition of Rs.2,35,285/- made on account of alleged aforesaid loss on Future & Options is thus, deleted.

5.

In the result, impugned order is set-aside and appeal of the assessee is allowed.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →