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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI R.C.SHARMA & SHRI VIKAS AWASTHY
PER VIKAS AWASTHY, JM:
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.
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
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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 ITA No.223/JP/2019 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.
Shri Bora representing the Department Kumar Padampani vehemently defended the impugned order and prayed for dismissing the appeal of the assessee.
Both sides heard and orders of authorities below were perused. The Assessing Officer in para 3.1 of the assessment order has tabulated
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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.
In the result, impugned order is set-aside and appeal of the assessee is allowed.
Order pronounced in the open court on Thursday, the 12th day of December, 2019. Sd/- Sd/- (R.C.SHARMA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated 12/12/2019 Vm, Sr. PS(O/S) Copy of the Order forwarded to : 1. The Appellant , 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file.
BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai