DEEJAY STOCKS PRIVATE LIMITED ,MUMBAI vs. DCIT-4(2)(1), MUMBAI

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ITA 1810/MUM/2024Status: DisposedITAT Mumbai18 July 2024AY 2016-174 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the assessee's appeals for statistical purposes. While acknowledging the Revenue's arguments and the findings of the lower authorities, including the reliance on SEBI's order and the assessee's non-cooperation, the Tribunal recognized the possibility of communication gaps. In the interest of justice, the Tribunal restored both appeals back to the CIT(A)-NFAC for fresh adjudication. The NFAC is directed to provide at least three effective opportunities of hearing to the assessee. The onus will be on the taxpayer to plead and prove all relevant facts in the consequential proceedings. No specific finding was made on the merits of the derivative transactions themselves, as the matter was remanded.

What were the facts?

The assessee, Deejay Stocks Private Limited, filed appeals for assessment years 2015-2016 and 2016-2017 against orders passed by the National Faceless Appeal Centre (NFAC), Delhi. These orders were issued under Section 147 read with Section 144 of the Income Tax Act, 1961. The NFAC had upheld the Assessing Officer's findings that the assessee was a beneficiary in derivative transactions amounting to Rs. 6,49,45,163/- for AY 2015-2016 and Rs. 3,75,97,175/- for AY 2016-2017. The assessee did not appear before the Tribunal, while the Revenue was represented. The Tribunal noted the assessee's non-cooperation during the assessment and appellate proceedings.

What were the issues?

1. Whether the National Faceless Appeal Centre (NFAC) erred in upholding the Assessing Officer's determination that the assessee was a beneficiary in non-genuine derivative transactions, contrary to the facts and evidence, and in violation of principles of natural justice, given the assessee's ex-parte adjudication? Assessee's contentions: Not recorded as the assessee was ex-parte. Revenue's contentions: The Revenue, through the CIT-DR, argued that there was sufficient cogent material to indicate the assessee was a beneficiary in non-genuine derivative transactions. The Revenue relied on SEBI's order dated 27.01.2021, which was also referred to by the CIT(A)-NFAC in its order.

Which sections of the Income-tax Act were involved?

Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI

Before: SHRI SATBEER SINGH GODARA & SHRI GIRISH AGRAWAL

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “D” BENCH : MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA.Nos.1809 & 1810/Mum./2024 Assessment Years 2015-2016 & 2016-2017 Deejay Stocks Private The DCIT-4(2)(1), Limited, 401, Shangrilla Apt. Erstwhile DCIT-12(2)(2), L.T. Road, Borivali (West), vs. Aayakar Bhavan, Maharshi Mumbai -400 092. Karve Road, Mumbai. Maharashtra. PIN – 400 020. PAN AADCD6404H Maharashtra. (Appellant) (Respondent) For Assessee : -None- For Revenue : Smt. Sanyogita Nagpal CIT-DR On behalf of Smt. Mahita Nair, Sr. DR Date of Hearing : 08.07.2024 Date of Pronouncement : 18.07.2024 ORDER PER SATBEER SINGH GODARA, J.M.

These assessee’s twin appeals, for assessment years 2015-2016 and 2016-2017, arise against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023-24/1060783941(1) and 1060784359(1) dated

2 ITA.No.1809 & 1810/Mum./2024 12.02.2024, in proceedings u/s.147 r.w.s.144 of the Income Tax Act, 1961 (in short “the Act”).

None for the assessee. Heard the department. Case files perused.

2.

It emerges at the outset from a perusal of the assessee’s pleadings as well as with the able assistance coming from the Revenue side that both the learned lower authorities have held the assessee a beneficiary in derivative transactions of Rs.6,49,45,163/- and Rs.3,75,97,175/- assessment year-wise; respectively; which stands upheld in the CIT(A)-NFAC’s ex-parte lower appellate discussion(s).

3. Mrs. Nair vehemently argued in support of the learned lower authorities findings that there existed sufficient cogent material indicating the assessee to have been a beneficiary in non- genuine derivative transactions. She further invited our attention to SEBI’s order dated 27.01.2021 in it’s detailed investigation as relied upon in the CIT(A)-NFAC’s discussion in para-4.5 pages-7 to 9. We note in this factual backdrop that the Assessing Officer’s assessment herein had also quoted assessee’s non-cooperation/non 3 ITA.No.1809 & 1810/Mum./2024 appearance during the course of scrutiny which continued in the lower appellate proceedings as well since we do not see any material to the contrary in the case files. The fact also remains that possibility of communication gaps at various levels in such instance could not be altogether ruled out. We deem it appropriate in these peculiar facts and circumstances as well as in the larger interests of justice, the assessee’s twin appeals deserves to be restored back to the CIT(A)-NFAC for it’s afresh appropriate adjudication, preferably within three effective opportunities of hearing, subject to the rider that it shall be the taxpayer’s onus and responsibility only to plead and prove all the relevant facts in consequential proceedings. Ordered accordingly.

3.

These assessee’s twin appeals ITA.Nos.1809 & 1810/ Mum./2024 are allowed for statistical purposes in above terms.

Order pronounced in the open Court on 18.07.2024 Sd/- Sd/- [GIRISH AGRAWAL] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 18th July, 2024 VBP/-

4 ITA.No.1809 & 1810/Mum./2024 Copy to

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