2023 (9) TMI 1214 - AT - Income Tax

Tribunal partially allows appeal, deletes additional amounts on issues 2 & 3, upholds disallowance of share trading loss.

The Tribunal partly allowed the appeal of the assessee, deleting the additional amounts added on issues 2 and 3, while upholding the disallowance of loss ... Disallowing loss on trading in shares - alleged company from which assessee booked loss is also identified one of the 84 BSE listed penny stock which have been used for generating bogus loss from share transactions - HELD THAT:- Even on similar facts and circumstances of the case, Hon’ble Jurisdictional High Court passed an order in the case of Swati Bajaj [2022 (6) TMI 670 - CALCUTTA HIGH COURT] which covered against the assessee.We, therefore, sustained the order passed by the authorities below and the ground taken by the assessee is dismissed. Addition on account of loss on sale of securities which turns into double addition in the hands of assessee - HELD THAT:- We notice that the ld. AO while framing the assessment order already disallowed a sum in the hands of assessee on account of loss of trading in shares from First Financial Services Ltd. separately and in addition in the hands of assessee which turned into double addition in the hands of assessee and same is not in accordance with law, therefore, we are not conformity with the view taken by the ld. CIT(A) by confirming the order passed by the ld. AO regarding the instant issue. Accordingly, ground taken by the assessee is allowed and addition made in the hands of assessee is hereby deleted. Addition of interest income due to the difference of income of assessee as per 26AS statement and actual interest figure shown in the profit & loss account - assessee alleged figure does not belong to the assessee and it was happened due to wrong credit given by the party i.e. Bengal Merlin Housing Ltd. - HELD THAT:- As the addition was done due to wrong reflection of interest income as reflected in 26AS statement of the assessee which does not belong to the assessee as the assessee has never earned such interest income from said credit entry reflected in 26AS statements and also from the statements of the AR that during the intervening time, assessee has already taken appropriate corrective steps to rectify the interest income which the assessee has never earned from the said credit and reflected in 26AS statement and necessary correction has already been done in 26AS statement of the assessee relevant to assessment year in question. We find it fit to allow the grounds taken by the assessee by setting aside the addition sustained in the hands of assessee and direct the AO to delete the same. Issues involved:The appeal against the order of the National Faceless Appeal Centre under the Income Tax Act, involving additions made by the Assessing Officer on various grounds.Issue 1 - Disallowance of loss on trading in shares:The Assessing Officer disallowed a loss claimed by the assessee on share trading, amounting to Rs. 6,43,238, considering it as not genuine. The Tribunal upheld this decision based on the nature of the transactions, involving a penny stock company and the lack of substantiating evidence.Issue 2 - Double addition on loss of sale of securities:The Assessing Officer made a double addition of Rs. 12,89,526 in the hands of the assessee regarding the loss on the sale of securities. The Tribunal found this double addition to be incorrect and deleted the additional amount added by the AO.Issue 3 - Disallowance under section 14A and interest income addition:The Assessing Officer disallowed Rs. 5,775 under section 14A and added Rs. 2,60,354 as interest income due to discrepancies in the 26AS statement. The Tribunal found that the interest income addition was based on incorrect information and directed the AO to delete the same.In summary, the Tribunal partly allowed the appeal of the assessee, deleting the additional amounts added on issues 2 and 3, while upholding the disallowance of loss on trading in shares in issue 1.