CHINMAY IMPEX PRIVATE LIMITED,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(1)(3), AHMEDABAD
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Income Tax Appellate Tribunal, AHMEDABAD “ B ” BENCH
Before: Smt. Annapurna Gupta & Shri T.R Senthil Kumar
xplanation
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “ B ” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R Senthil Kumar, Judicial Member ITA No:1111/Ahd/2023 Assessment Year: 2015-16 Chinmay Impex Private The Income Tax Limited, OfficerWard-(1)(3), C/o.MS Chhajed & Co.CA, Vs Ahmedabad. “Kamal Shanti”, Near Sardar Patel Statue, Ahmedabad-380014. PAN: AADCC6478J (Appellant) (Respondent) Assessee Represented: Shri M.S Chhajed, AR Shri Malarkodi R, SR-DR Revenue Represented: Date of hearing : 14-05-2024 Date of pronouncement : 29-05-2024 आदेश/ORDER PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the assessee as against the ex-parte appellate order dated 22.09.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi arising out of the assessment order passed under section 143 r.w.s 147 of the Income-Tax Act, 1961 [hereinafter referred to as "the Act"] relating to the Assessment Year (AY) 2015-16.
The registry has noted there is a delay of 35 days in filing the appeal. The assessee-company has filed an affidavit stating that they were searching for a Chartered Accountant to file the appeal before the Tribunal. After contacting the present Chartered Accountant, the
ITA No.1111/Ahd/2023 Chinmay Impex vs. ITO Asst.Year 2015-16 2 assessee company filed the appeal with a delay of 35 days and requested to condone the same.
2.1 We are not convinced with the reason stated in the affidavit. The assessee is not an individual to make this claim, that it was searching for a Chartered Accountant to file the appeal before the Tribunal. The assessee being a private limited company statutorly required to file its Books Audited through qualified Chartered Accountant. This reason cited by the assessee is not found to be satisfactory and convincing. Further the appellate order passed by the CIT(A) is also exparte order after granting six opportunities to the assessee and no explanation offered for non-appearance. Therefore, in the interest of justice, we condone the delay by imposing a cost of Rs.5000/- payable to “Prime Minister National Relief Fund” within 10 days of receipt of this order. 3. The brief fact of the case is that the assessee is a private limited company and engaged in the business of trading of Metal Scraps. For the Asst. Year 2015-16, the assessee filed its return of income on 30.09.2015 showing total income of Rs.8,83,560/-. Assessment was re-opened by issuing a notice u/s.148 dated 30.03.2021 recording the reason that the assessee had indulged in generating non-genuine profit amounting to Rs.1,00,92,250/- by trading in illiquid stock options of BSE during the relevant Asst. Year. Thus, the assessee was benefited from engaging in reversal trades in illiquid stock options on BSE, resulting in non-genuine/ bogus profit of Rs.1,00,92,250/- which has escaped assessment.
During the re-assessment proceedings the assessee made submission before the AO, however, the same were rejected as the
ITA No.1111/Ahd/2023 Chinmay Impex vs. ITO Asst.Year 2015-16 3 assessee is also a beneficiary of reversal trade wherein non genuine profit of Rs.1,00,92,250/- was earned by the assessee in trading the illiquid stock transaction which is treated as unexplained credit u/s. 68 of the Act and added to the total income of the assessee and demanded tax thereon.
Aggrieved against the same, the assessee is in appeal before us raising the following grounds of appeal. 1. The order passed by the Ld. CIT (A) is against law, equity & justice. 2. The Ld. CIT (A) has erred in law and on facts in upholding validity of reopening of assessment though Ld. PCIT has granted mechanical approval u/s 151 of the Act. 3. The Ld. CIT (A) has erred in law and on facts in upholding validity of reopening of assessment though Reopening of assessment is on borrowed satisfaction and without independent application of mind. 4. The Ld. CIT (A) has erred in law and on facts in upholding validity of reopening of assessment though the Ld. AO has assumed jurisdiction on the basis of some non specific & vague information. 5. The Ld. CIT (A) has erred in law and on facts in upholding validity of reopening of assessment though Reopening of assessment is based on incorrect facts. 6. The CIT(A) has erred in law and on facts in upholding addition made by the Ld. A.O. of Rs. 1,00,92,250/- U/S 68 of the Act 7. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.
The Ld. Counsel Shri M.S Chhajed, appearing for the assessee argued both on the validity of the re-opening of the assessment as well as merits of the case on the addition made u/s.68 of the Act. The Ld. Counsel submitted that the assessee did all transaction of purchase and sale of Currency Derivatives through broker only and all the payment received through banking channel only as the
ITA No.1111/Ahd/2023 Chinmay Impex vs. ITO Asst.Year 2015-16 4 assessee is in the business of import and export, so to minimize the risk of Foreign Exchange Fluctuation the assessee is making investment in Currency Derivatives since long time. Further the assessee had earned profits in various previous years and offered income and paid tax thereon. Thus the assessee already disclosed the profit earned in its Audit Books of accounts and paid the tax thereon. Therefore the impugned addition made by the AO amounts to a double taxation, which is contravention of the settled provision of law and the addition is liable to be deleted.
Per contra, the Ld.Sr-DR appearing for the Revenue supported the order passed by the lower authorities and requested to confirm the same.
We have given our thoughtful consideration and perused the materials available on record. It is undisputed fact that assessee had purchased a Currency Derivatives through registered broker namely Giriraj Stock Broking Pvt. Ltd. and earned profit of Rs.1,30,94,265/- copy of the ledger account filed at page no. 74 of the paper book and credits in the Exchange Rate Fluctuation account which is available at page no.75 to 77 of the paper book . The assessee has also shown net surplus earned on sales of Currency Derivaties of Rs.1,21,49,278/- and in schedule-1 “other income” in the Audited profit and loss account and paid tax thereon. There is considerable force in the arguments making addition u/s.68 again in the hands of the assessee will amount to double taxation. Since the assessee could not participate in the appellate proceedings and produced the relevant details, which has resulted in ex-parte order. Therefore in the interest of justice we deem it fit to set-aside this addition only to
ITA No.1111/Ahd/2023 Chinmay Impex vs. ITO Asst.Year 2015-16 5 the file of the Jurisdictional Assessing Officer and decide the same on merits of the case, after giving proper opportunity of hearing to the assessee. Thus, we are dismissing the ground nos. 1 to 5 challenging the validity of the re-opening of the assessment. 9. In the result, the appeal filed by the assessee is partly allowed for the statistical purposes.
Order pronounced in the open court on 29-05-2024 Sd / Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER (True Copy) (True Copy) Ahmedabad : Dated 29/05/2024 Manish
