“circular trading”

ACIT Circle 4(3)(1), Mumbai vs. Johnson Dye Works Pvt Ltd, Mumbai

In the result, the appeal filed by the revenue is hereby dismissed

Bench: Ms. Kavitha Rajagopal, Jm & Shri. Prabhash Shankar, Am Acit Circle 4(3)(1), Mumbai Johnson Dye Works Pvt. Ltd. Aayakar Bhavan, M. K. Road, Ground Floor, New Era House, Churchgate – 400020. Vs. Mogul Lane, Matunga (W), Mumbai – 400016. Pan/Gir No. Aaacj2082J (Assessee) : (Respondent) Assessee By : Shri. Jayesh Dadia/Samir Shah Respondent By : Shri. Ajay Singh (Sr. Dr) Date Of Hearing : 04.02.2025 Date Of Pronouncement : 30.04.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Assessee, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short), National Faceless Appeal Centre (‘Nfac’ For Short) Passed U/S. 250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2012-13. 2. The Revenue Has Raised The Following Grounds Of Appeal Along With Additional Grounds Of Appeal: “1. Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit (A) Has Erred In Deleting Transactions Of Rs. 2,12,42,250/-In Nsel Exchange As Client Code Modification Transaction For Shifting Of Profit/ Loss Added To The Income Of The Assessee Relying On The Decision In The Case Of Coronation Agro Industries Ltd. Vs. Dcit 390 Itr 464 (Bom.) Without Going Into The Merits Of The Case? Johnson Dye Works Pvt. Ltd.

Assessing Officer noticed that there were instances of client code modifications. The Assessing Officer believed that the same was done to indulge in circular trading to pass on profits or losses to the clients of the assessee company as per requirements. After hearing the assessee, the Assessing Officer made additions

ACIT Circle - 22(1), Mumbai vs. Nilesh Haresh Parwani, Mumbai

In the result, the Cross Objection by the assessee is allowed, while the Revenue’s appeal is dismissed

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

penny scrip, trading transactions of purchase and sales are not affected for commercial purpose but to create artificial Gain/loss and complete the cycle of circular trading with a view to evade taxes. 5. On the facts and the circumstance of the case and in law the Ld. CIT(A) erred

Hasmukh Khetshi Shah, Mumbai vs. ITO Circle 23(1), Mumbai

In the result, the appeal filed by the Assessee stands allowed

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankarassessment Year: 2010-11

Tribunal in error in upholding the deletion when the AO had established that the motive of the client code modification was to indulge in circular trading to enable the generation of either profits or losses as required by clients at the end of the financial year? 3. The respondent Assessee ... Assessing Officer noticed that there were instances of client code modifications. The Assessing Officer believed that the same was done to indulge in circular trading to pass on profits or losses to the clients of the Assessee company as per requirements. After hearing the Assessee, the Assessing Officer made additions

ITO Ward 3(4), Thane vs. Sunil Kumar Bagaria, Thane

In the result, the appeal by the Revenue is dismissed

Bench: Shri Sandeep Singh Karhailshri Girish Agrawalito, Ward-3(4), Room No.9, B-Wing, 6Th Floor, Ashar It Park, Wagle Industrial Estate, ............... Appellant Thane West - 400604

financial rationale. The AO also took into consideration the modus operandi adopted by penny stock companies for rigging the price of the shares through circular trading. The AO, after analysing the financials of Tilak Venture Ltd., held that there was no substantial change in the financials of the company

Bhagwati Rajaram Chandora, Mumbai vs. ITO Ward 18(1)(2), Mumbai

In the result, the appeal by the assessee is allowed

Bench: Shri B.R. Baskaranshri Sandeep Singh Karhailbhagwati Rajaram Chandora, Room No.30, 3Rd Floor, Ganesh Bhuwan, 80 Ramwadi, Kalbadevi Road, Mumbai – 400002 ............... Appellant Pan : Aecpc8718H V/S Ito, Ward – 18(1)(2), Mumbai - 400002 ……………… Respondent

beneficiaries. The AO also took into consideration the modus operandi adopted by penny stock companies for rigging the price of the shares through circular trading. Accordingly, the AO came to the conclusion that the shares traded value of ₹ 93,24,485 in the scrip of M/s Paneta Industries

DCIT, Central Circle - 7(1), Mumbai vs. Supreme Holdings and Hospitality (India) Limited, Pune

In the result, appeal of the Revenue and Cross Objection of the assessee are dismissed

Bench: SHRI AMIT SHUKLA (Judicial Member), MS PADMAVATHY S (Accountant Member)

order has referred to the various statements of the Director of M/s. Asuti Trading Pvt. Ltd., wherein it was admitted that company was doing circular trading amongst various other companies of Jatia Group. It was also admitted that one, Shri Debasish Pal was the dummy director ... Holdings & Hospitality (India) Ltd., 16. The entire allegation of the ld. AO seems to be based on finding that these entities were doing some circular trading and they had defrauded the bank by adopting modus operandi of rotation of funds from one entity to another and misusing the LC facility

Hitesh Mangilal Jain, Mumbai vs. ITO - 19(1)(5), Mumbai

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

other operators also. The AO has observed that the above transactions were non genuine and prices of scrips were rigged and are raised through circular trading. The assessee failed to state any satisfactory reply to justify the logic behind genuine purchase of the above shares vis-a vis failed ... other hand he AO had could demonstrate how the price of shares of the penny stock companies were rigged and were raised through circular trading. It is observed that the appellant was unable to file any satisfactory reply to justify the logic behind genuine purchase of the above shares

Hitesh Mangilal Jain, Mumbai vs. ITO 19(1)(5), Mumbai

Appeals of the assessee are partly allowed

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

other operators also. The AO has observed that the above transactions were non genuine and prices of scrips were rigged and are raised through circular trading. The assessee failed to state any satisfactory reply to justify the logic behind genuine purchase of the above shares vis-a vis failed ... other hand he AO had could demonstrate how the price of shares of the penny stock companies were rigged and were raised through circular trading. It is observed that the appellant was unable to file any satisfactory reply to justify the logic behind genuine purchase of the above shares

Income Tax Officer, Mumbai vs. Hitesh Mangilal Jain, Mumbai

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

other operators also. The AO has observed that the above transactions were non genuine and prices of scrips were rigged and are raised through circular trading. The assessee failed to state any satisfactory reply to justify the logic behind genuine purchase of the above shares vis-a vis failed ... other hand he AO had could demonstrate how the price of shares of the penny stock companies were rigged and were raised through circular trading. It is observed that the appellant was unable to file any satisfactory reply to justify the logic behind genuine purchase of the above shares

ITO Ward-22(1)(6), Mumbai vs. Jalpa Nitesh Shriwardhankar, Mumbai

In the result, the appeal by the Revenue is dismissed

Bench: Shri Prashant Maharishishri Sandeep Singh Karhailito, Ward-22(1)(6), Mumbai – 400012 Maharashtra ……………. Appellant

penny scrip, trading transactions of purchase and sales are not affected for commercial purpose but to create artificial Gain/loss and complete the cycle of circular trading with a view to evade taxes. 3. On the facts and the circumstance of the case and in law the Ld. CIT(A) erred