Tribunal allows appeal against CIT(A) order for AY 2005-2006 under IT Act Sections 144 & 147. No additions under Section 69C.

The Tribunal allowed the assessee's appeal against the CIT(A) order for Assessment Year 2005-2006 under Section 144 read with Section 147 of the IT Act. The Tribunal found no actual payments for share purchases, profits were booked without share delivery, and the appellant had already declared and assessed income from subsequent share sales. As a result, the Tribunal concluded that there was no justification for additions under Section 69C, leading to the allowance of the assessee's appeal.

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Issues:
- Appeal against CIT(A) order for Assessment Year 2005-2006 under Section 144 read with Section 147 of the IT Act.
- Addition made under Section 69C for unexplained credit.
- Allegations of involvement in fraudulent billing activities and bogus speculation profit/loss.

Analysis:
1. The appeal was filed against the CIT(A) order for the Assessment Year 2005-2006 under Section 144 read with Section 147 of the IT Act. The issue revolved around the addition made by the AO under Section 69C for unexplained credit related to alleged fraudulent activities.

2. The AO received information regarding the appellant's involvement in a share scam where the appellant was identified as one of the beneficiaries of a group engaged in fraudulent billing activities and bogus speculation profit/loss. The AO alleged that the appellant laundered money through cash payments to the group.

3. The AO contended that the appellant had shown gains on share trading through transactions with a specific company for the purpose of generating bogus gains. The AO issued a notice under Section 147 and added the transaction amount to the appellant's income under Section 69C.

4. The CIT(A) confirmed the AO's action, leading to the appeal. During the proceedings, the CIT(A) obtained a remand report confirming the appellant's involvement in fraudulent activities with a specific company to generate bogus Long Term Capital Gains.

5. The appellant argued that the funds used for share transactions were from profits declared and assessed in subsequent years. The appellant contended that no addition was warranted for the year under consideration.

6. After considering the contentions and evidence, the Tribunal found that no actual payments were made for the share purchases, and profits were booked without delivery of shares. The Tribunal noted that the appellant had disclosed profits from speculative transactions and had already declared and assessed income from subsequent share sales.

7. The Tribunal concluded that since no payments were made for the share purchases and no receipts were obtained from share sales during the year under consideration, there was no justification for the additions under Section 69C. The appeal of the assessee was allowed based on these findings.

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