MOHMMAD. MUZAFFAR. BEIGH,SRINAGAR vs. INCOME TAX OFFICER WARD-3(5), SRINAGAR

Assessee has filed an application for condonation of delay of 101 days wherein, the ld. Sr. DR has not made any strong objection for condonation of delay. Therefore, the delay of 101 days is condoned.

Brief fact of the case is that the assessee’s case was reopened u/s 148 on basis of the information from Annual Information Report/Central Information Branch for investment in purchase of share/mutual funds/RBI Bonds aggregating to amount of Rs.1,79,91,721/-. The investment was made in previous years. The ld. AO during assessment calculated the purchase of shares invested by the assessee amount of Rs.5 lac and the capital gain on sale of share under short term capital gain was worked out amount of Rs.2 lac. So, the total addition was made Rs.7 lacs.

During hearing the assessee was called for hearing but no one was present on behalf of the assessee. The matter was fixed in several dates. In view of the above and considering the nature of dispute, we proceed to dispose the appeal of the assessee ex-parte qua after hearing the learned DR and on the basis of material available on the record.

We heard the submission of the ld. Sr. DR and considered the documents available in the record. The assessee first challenged the jurisdictional ground for reopening u/s 148 but the issue was well settled by the ld. CIT(A) and speaking order was passed. The ld. Sr. DR first pointed out the relevant paragraph of the order of the ld. CIT(A) page no. 8 which is extracted below: “..............It has also been noticed that the Assessing Officer has duly issued notice under section 143(2) of the Act and it is wrong on the part of the learned AR of the assessee to allege that no notice under section 143(2) of the Act has been issued in this case. As per provisions of section 292B/292BB of the Act, even non-issuing of notice u/s 143(2) of the Act cannot be challenged at this stage. As the assessee did not furnish any evidence to prove his initial investment or for earning of short- term capital gain from business of trading in shares, I do not find any fault in the action of the Assessing Officer in reopening the assessment in this case and thereafter making impugned additions. So, the action of the Assessing Officer in reopening the assessment in this case and thereafter making both the impugned addition of Rs.5,00,000/- on account of unexplained initial investment in share trading business and Rs.2,00,000/- on account of undisclosed short term capital gain cannot be said to be unjustified and as such all the actions of the Assessing Officer with regard to reopening of assessment and making impugned additions are, therefore, upheld. In the result, the grounds No. 1, 2, 3, 4, 5 and 6 of appeal taken by the assessee are dismissed.

In factual position the assessee has already transacted the share/mutual funds in amounts of Rs.1,79,91,721/- for relevant financial year. In quantum assessment the assessee had not contradicted the transaction amount with ld. AO. The ld. AO has correctly calculated the investment part in share amount of Rs. 5 lacs. Further, during the year the assessee had liquidated the investment and had incurred the STGC amount of Rs.2 lacs. The source of investment amount of Rs. 5,00,000/- is remained unexplained before the bench. We find no infirmity in the order of the ld. AO. The assessee had not able to submit any contradictory fact or any calculation against the order of the ld. AO. The ld. CIT(A) has discussed both the legal and factual issue in the order. We are not intervening in the order of the revenue authorities in this stage. Accordingly, the addition made by the assessing authority is upheld.

In the result, the appeal of the assessee bearing is dismissed.