SUKESH VINOD GOEL,MUMBAI vs. ITO 8(1)(4), MUMBAI

This appeal is filed by assessee against the order of CIT(A)-16, Mumbai dated 09/03/2015 for A.Y.2009-10 in the matter of order passed u/s.143(3).

In this appeal, assessee is aggrieved for the addition made by AO on account of sale of investment by some broker amounting to Rs.24,61,394/- considering the same as income of the assessee without appreciating the fact that said investment does not pertain to the assessee.

Rival contentions have been heard and record perused. Facts in brief are that as per the CASS report the case of assessee was selected for scrutiny for verification of AIR information. Perusal of AIR information, it is seen that the assessee had entered into share investment transactions worth Rs.62,25,55,946/- with M/s. Multiplex Capital Ltd, Delhi. In this regard, vide office letter dt. 23.09.2011, 13.10.2011 and 03.11.2011, assessee was requested to furnish the details of transactions with the sources thereof, details of profit / gain out of the transactions. AO stated that for verification of the transactions, notice u/s.l33(6) was also issued to the share broker. In response, M/s. Multiplex Capital Ltd had furnished the copy of assessee's ledger account in its books. M/s. Multiplex Capital Ltd had stated that the assessee had entered into various transactions as per the ledger account during the period. By observing that these transactions does not find place in assessee’s return of income, investment, balance sheet as well as computation of income, AO added same in assessee’s income.

By the impugned order, CIT(A) confirmed the action of the AO against which assessee is in further appeal before us.

It was contended by learned AR that the assessee has merely opened an account with M/s. Multilpex Capital ltd, and not given any instruction to do any kind of share transaction. When the assessee has come to know that the broker has done transaction in his account without the knowledge of him, he prepared the agreement / affidavit with the share broker that he will not be held responsible for transactions which are entered in his account. Further the same has been confirmed by the broker by various letters. The assessee has not given / received any payment to / from broker. This can easily seen by bank statement and bank book account maintained by the Assessee and same has been submitted to Assessing Officer. Our attention was also drawn to the letter directly given by the Multiplex Capital Ltd., to AO dated 14/12/2011 wherein following was observed:- “With reference to above and in continuation of our letter 23rd November, 2011 we hereby confirm the transaction reflecting in the statement for the F.Y.2008-09 which is already submitted by our earlier letter dated 31st October, 2011 were actually wrongly punched in Equity Segment instead of other segment by the dealer trading at that time. These transactions are wrongly punch and posted in the above parties ledger account.”

On the other hand, learned DR contended that there was clear information to the AO regarding transaction having been entered by the assessee for sale of shares with Multiplex Capital Ltd.,. He also invited our attention to the letters replied by Multiplex Capital Ltd., to the AO confirming the transactions. As per learned DR, letter dated 14/12/2011 was after thought, the same should be ignored.

I have considered rival contentions and carefully gone through the orders of the authorities below. There is a contradiction in the statement / contention by the broker M/s. Multiplex Capital Ltd., Furthermore, to coming to a conclusion that assessee had actually sold shares and received the sale proceeds. AO has not verified nor communicated as to whether any amount was paid by broker to the assessee which reflects in its bank account. Thus enquiry made by the AO is not sufficient to hold that assessee was in receipt of Rs.24,61,394/-. In the interest of justice, I restore the matter back to the file of the AO with a direction to the AO to make full enquiry with regard to any shares having been actually sold by the assessee, fact of its acquisition and the amount credited in the bank account of the assessee for the shares alleged to be sold. Needless to say that assessee should be given due opportunity before reaching to the conclusion. 8. In the result, appeal is allowed for statistical purposes.