DARAKHSHAN MUSTAHASAN SHAIKH,MUMBAI vs. ACIT - 30(1), MUMBAI

This appeal by the assessee is preferred against the order dated 12/04/2024 by NFAC, Delhi [in short ‘ld. CIT(A)’], pertaining to AY 2012-13.

The challenge of the assessee is two-fold. Firstly, the assessee has challenged the very jurisdiction of the AO for re-assessment and on merits of the case, the assessee is aggrieved by the addition of Rs.18,92,250/- u/s 68 of the Act. 3. Representatives of both the sides were heard at length. Case records carefully perused. 4. Briefly stated the facts of the case are that the assessee filed her return of income on 19/09/2012 declaring total income of Rs.96,06,327/-. The AO was in possession of an information received 2 from DDIT(Inv.)-Unit 6(3), Mumbai, that the assessee was involved in Client Code Modification (CCM). Accordingly, notice u/s 148 of the Act was issued and served upon the assessee. In response to which the assessee filed her return of income and accordingly statutory notices were issued and served upon the assessee. The AO made inquiries from National Spot Exchange Limited (NSEL) and on receiving reply from the NSEL the AO came to know that the assessee had entered in CCM. Therefore, a showcause notice was issued to the assessee. In her reply the assessee stated that her gross total income comprises of income from speculation activity of Rs.11,48,457/- as income from NSEL via M/s. Anand Rathi Commodities Limited (hereinafter ‘M/s. ARCL’) where CCM had happened. It was further explained that the assessee had never received the contract notes and on making inquiry with M/s. ARCL, the assessee came to know about buy and sell of Kastkadi being 600 in quantity where total value of buy was Rs.18,46,845/- and sale value of Rs.18,92,250/-. Since the contract notes were not made available by the broker, the assessee could not add the profit in her computation of income. However, it was pointed out that the profit of Rs.47,250/- was included in the net gain of Rs.10,02,110/- and shown under the head income from other sources in the computation of total income. The reply of the assessee did not find any favour with the AO who completed the assessment by making addition of Rs.18,92,250/- u/s 68 of the Act. 4.1. The assessee carried the matter in appeal before the ld. CIT(A) but without any success.