KISHAN GUPTA,NEW DELHI vs. ITO, WARD- 14(4), NEW DELHI

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ITA 8744/DEL/2019Status: DisposedITAT Delhi20 June 2023AY 2011-122 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO's reason for rejecting the genuineness of the transactions was incorrect, especially since there was zero tax implication. The addition made on account of the entire sale receipts was deleted.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 4,17,940/- on account of sale of shares, despite the assessee incurring a loss of Rs. 27,634/- in the transaction. The source of investment was not disputed, and the assessee had not claimed the loss or set it off.

What were the issues?

Whether the AO was justified in adding the entire sale proceeds of shares without considering the loss incurred by the assessee, and whether the assessment order passed under Section 144 was valid.

Which sections of the Income-tax Act were involved?

Section 144,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Dr. B. R. R. Kumar

For Appellant: Adv. &
Hearing: 16.05.2023Pronounced: 20.06.2023

ORDER The present appeal has been filed by assessee against the order of ld. CIT(A)-5, New Delhi dated 28.06.2019.

2. Following grounds have been raised by the assessee:

“1. Determining taxable income of Rs.6,43,540/- as against the returned income of Rs.2,25,600/-.

2.

Passing order U/s 144 r.w.s 147 of The Income Tax Act, 1961 relying on the information received from Investigation wing Mumbai without applying his own mind that assessee has suffered losses of Rs.10,205.15/- from trading of shares.

3.

Accepting net loss as shown by assessee from trading of shares of Rs.10,205.15/-, inspite Ld. A.O. has given a categorical finding that appellant had only indulged in trading of shares which was categories as Penny Stock and think had not done any genuine business and rejected the book loss on that ground net loss shown in the return has lost it's relevance and should not be given any credence and added full Kishan Gupta trading amount of Rs.4,17,940/- without applying his mind.

4. Wrong in the passing of assessment order by adding trading value of shares of Rs.4,17,940/- without considering loss on trading.”

3. It is found that the Assessment Order has been passed u/s 144 of the Income Tax Act, 1961. The AO made addition of Rs.4,17,940/- on account of sale of shares worth Rs.4,17,917/- which have been purchased earlier for an amount of Rs.4,45,575/-. The assessee has incurred loss of Rs.27,634/- in this transaction. This loss was neither claimed by the assessee nor set off against any income. The source of investment is not in dispute. The assessee has conceded in assessment before the AO that he has neither made any material profit nor incurred sizeable loss out of those transactions and so the reason as advanced for not accepting the genuineness of the transactions of the assessee is ex facie wrong. Keeping in view that zero tax implication in the specific facts of this case, the addition wrongly made on account of the entire sale receipts of Rs. 4,17,940/- is hereby deleted.

4.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 20/06/2023.

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