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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Shri J. Sudhakar Reddy]
order
: February 19th, 2020 ORDER
Per J. Sudhakar Reddy, AM:
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-10, Kolkata [‘CIT(A)’ for short] dated 05.04.2019 u/s 250 of the Income Tax Act, 1961 (‘the Act’ for short) for AY 2010-11 on the following grounds: “
1) On the facts brought on record the learned Commissioner of Income Tax (Appeals) was erred in not treating the notice issued u/s 148 of the Income Tax Act, 1961 as invalid and bad in law. 2) On the facts brought on record the learned Commissioner of Income Tax (Appeals) was erred in treating the commodity derivative trading profit of Rs. 1,83,776/- as bogus. 3) On the facts brought on record the learned Commissioner of Income Tax (Appeals) was erred in making addition of commodity derivative profit u/s 68 of the Income Tax act, 1961. 4) On the facts brought on record the Learned Commissioner of Income Tax (Appeals) was erred in confirming addition of Rs. 1,83,776/-. 5) On the facts brought on record the Learned Commissioner of Income Tax (Appeals) was erred in confirming disallowance of Rs. 523/- made u/s 57 of the Income Tax Act, 1961. 6) The appellant craves leave to add/or amend any grounds of this appeal.”
2. The facts of the case are brought out at para 4 page 3 of the assessment order which is extracted for ready reference:
Assessment Years: 2010-11 Neha Rajpuria. “Assessee has filed a return vide acknowledgement No. 760919210190417 u/s.148 on 19/04/2017 declaring total income of Rs.1,90,841 /-. The assessee vide her submission dated 03/05/2017 asked for the reason for reopening her case for re-assessment and the same has been provided to the assessee vide this office letter No. 99 dated 06/06/2017. The same has been placed on record vide order sheet noting dated 06/06/2017. Accordingly, notices u/s 143(2) and 142(1) dated 08/06/2017 were issued and served. In response to the said notices, Sri Prawesh Beria, FCA and Authorised Representative of the assessee, appeared from time to time and explained the return of income along with supporting documents. During the year, assessee has shown income under the head Other Sources. Assessee has considered alleged ingenuine commodity profit amounting to Rs. 1,83,776/- under the head Other Sources.”
The AO passed an order u/s 147 r.w.s. 143(3) of the Act on 22.12.2017 determining the total income at ₹1,91,364/-. The assessee challenges the re-opening of assessment. The contention of the assessee is that, the commodity derivative resulted in the assessee having a profit of ₹1,83,776/- and that this was disclosed as income and offered to tax by the assessee while filing his original return of income on 16.07.2010 and hence re-opening of the assessment on the ground that this amount of ₹1,83,776/- has escaped assessment is factually incorrect. He further submits that this fact that the assessee has disclosed this amount as income in the original return of income is clear from the assessment order as no addition has been made on this ground by the AO.
The ld. DR relied on the order of the ld. CIT(A) and submitted that these are bogus profits and hence, simply because the assessee has offered the same to tax in its return of income, the re-opening cannot be quashed.
After hearing rival contentions we find that there is no escapement of income in this case as alleged in the reasons for re-opening. The amount in question, which is profit earned on commodity derivative trading was already offered to tax as income by the assessee while filing her original return of income on 16.07.2010. The AO had also accepted this. Thus the re-opening is bad in law. Therefore, I quash the re-opening of assessment made u/s 147 of the Act as bad in law and allow this appeal of the assessee.
In the result, the appeal of the assessee is allowed.
Kolkata, the 19th February, 2020.