M/S BAGRECHA INVESTMENTS,HOWRAH vs. I.T.O.,WARD-34(1), KOLKATA

The assessee in the present case is a partnership firm, which filed its return of income for the year under consideration originally on 16.07.2011 declaring its total income at ‘NIL’. Although the said return Assessment Year: 2011-2012 M/s. Bagrecha Investments was initially accepted under section 143(1) of the Act on 31.12.2011, the assessment was subsequently reopened by the Assessing Officer under section 147 on the basis of information received from the DGIT(Inv.), Kolkata showing that the assessee had transacted in the shares by misusing the NMCE platform. Accordingly a notice under section 148 was issued by the Assessing Officer on 23.03.2018 after recording the reasons. In response to the said notice, a fresh return of income was filed by the assessee on 11.04.2018. In the assessment completed under section 143(3)/147 of the Act vide an order dated 12.12.2018, the Assessing Officer held that the transactions of commodities trading shown by the assessee were not real and the profit from commodities trading as disclosed by the assessee in the return of income amounting to Rs.3,25,332/- was liable to be treated as unexplained cash credit under section 68. On appeal, the ld. CIT(Appeals) upheld the order of the Assessing Officer on this issue. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. Counsel for the assessee, the nil income declared by the assessee in its return of income was inclusive of the profit of Rs.3,25,332/- from commodities trading and although the same was shown as reduced by the Assessing Officer from ‘nil’ income in the computation of total income before making addition of the similar amount under section 68, the amount of gross total income was wrongly taken by him at Rs.3,25,332/- instead of a loss of Rs.3,25,332/-. He has invited my attention to the computation of total income given by the Assessing Officer at page 4 of the assessment order to point out this mistake and even the ld. D.R. has not disputed the fact that there is an advertent mistake committed by the Assessing Officer while computing the total income as pointed out by the ld. Counsel for the assessee. I accordingly direct the Assessing Officer to re-compute the Assessment Year: 2011-2012 M/s. Bagrecha Investments total income of the assessee after making the said correction and allow this appeal of the assessee.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on February 19, 2020.