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TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1130
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.... Tribunal. 3. The brief facts of the case is that the assessee is an individual and derive income from partnership firm, brokerage from Kirti R Shah Share & Stock Brokers Pvt. Ltd. as sub-broker and income from other sources. The assessee filed its original Return of Income for the Assessment Year 2016-17 on 28/02/2017 declaring total income of Rs. 4,98,460/-. The assessee's case was taken for scrutiny assessment and after calling for information by issuing notice u/s. 143(2) and 142(1) of the Act, assessment has been completed. The assessee submitted trading statement vide letter dated 09/11/2018, showing gross payment of Rs. 1,76,83,099/-, wherein payout received of Rs. 1,20,76,469/- from main broker of Bombay, thus net receipt of Rs. 56,06,630/-. The assessee, to avoid further litigation, to obtain peace of mind, to maintain liquidity of business as well as to maintain the client, voluntarily offered 8% income on the above net receipt of Rs. 56,06,630/- which comes to Rs. 4,48,530/-. The Ld. A.O. on verification of detail of transaction were called for from the main broker Kirti R Shah Share & Stock Brokers Pvt. Ltd. by issuing summons u/s. 133(6) held that the assessee has m....
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....me from various partnership firms from where I earn interest on capital and remuneration as business income. The business modus operandi as sub-broker has been to enter into securities transactions on behalf of clients against payments received for stocks bought by them through licensed terminal supplied by Kirit R. Shah and Stock Brokers Private Limited. Hence, on basis of turnover effected, 1 have received sub-brokerage from Shri Yogeshbhai Dahyalal Patel, broker of Kirit R. Shah and Stock Brokers Private Limited. [2] Further, your goodself will appreciate the fact that details of clients who have entered into equity transactions including name, address, pan and confirmation of accounts are already on record with submission dated 21/11/2018. Hence, notice alleging that details of contract receipts, person from whom such receipts received, mode of receipt etc. is not available in scrutiny records is devoid of merit and facts of our case. I therefore request to drop the proceedings if the sole reason for proposing revision is on this ground alone. The AO on the basis of detailed scrutiny and verification alone has assessed the income @8% of such receipts by application of ....
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....ng the assessment proceedings, a copy of Bank account of the assessee having current bank account no 221120110000002 of BANK OF INDIA visnagar branch was filled as on 24/05/2018. It is evident from this account the entire payment of Rs.1,76,83,099/- was made to main broker Kirti R shah Stock Broker P. Ltd. as reiterated throughout the assessment proceedings that the assessee had simply worked as a share Sub broker for the main broker Kirti R Shah stock broker P. Ltd. Further, whatever payment received by him from his customers were transferred or ultimately credited in the Bank account of Kirti R Shah stock broker P. Ltd., and thus assessee had not made any investment from this or any other bank account or in cash as enquired by the AO in the notice letter dated 22/10/2018. It is pertinent to note that being a share sub broker the assessee was entitled to 1% commission on total volume of trading in equity from his main broker, instead, had shown this income at Rs.1,71,570/- and then again by reply letter dated 19/12/2018 he had offered 8% income for the figure Rs.56,06,630/- (difference between bank transaction credit Rs.17683099/- and banks account transactions debit amount Rs.120....
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.... issue found error in the order of AO and still directed him to make assessment de novo. These things contradict each other. The act of the CIT calling for making further enquiries and assessment de novo showed that the CIT was not sure as to the original order being erroneous. The revision was not therefore justified. Reliance is place in the matter of Vardhman Industries Ltd. v. Dy. CIT (2017) 153 TR (A) 566 (Chand-Trib). [6] It is pertinent to note here that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the assessing officer. Every loss of revenue as a consequence of an order of the assessing officer cannot be treated as prejudicial to the interests of the revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue, unless the view taken by, the Income Tax Officer is unsustainable in law. The power to revise cannot be e....
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....interest of Revenue in as much as the AO had failed to correctly observe facts on record in relation to the transaction with Broker Kirit R Shah share & stock brokers Pvt. Ltd. 2.2. That in the facts and circumstances of the case as well as in law, the Ld. Pr. CIT has grievously erred in law and on facts in holding that the order of assessment passed u/s 143(3) on 20-12-2018 by AO was erroneous and prejudicial to interest of Revenue. It is therefore prayed that the order of revision u/s. 263 was illegal & bad in law or in alternative the entire sale price was not undisclosed income. 7.1. The Ld. Counsel Mr. S.N. Divetia appearing for the assessee filed before us a Paper Book containing various details filed by the assessee before the Assessing Officer during the course of assessment proceedings, more particularly in response to the notices issued u/s. 142(1) calling for various details and submitted that after through verification of the entire transaction, the Assessing Officer accepted the 8% presumptive income offered by the assessee. The Ld. A.R. further submitted that it is evident beyond doubt that not only details regarding the amount of Rs. 56,06,630/- ....
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....9/12/2018 including Certificate of STT paid as well as ledger account of Trading and profit and loss account etc. and submitted that the assessee had not made many gain or loss as shown in the trading account of the main broker firm namely KIRTI R. SHAH SHARES AND STOCKBROKERS P. LTD. The gain or loss is attributed/allocated to different clients who had made trade in equity through the assessee with the main broker of Bombay. Thus non speculative loss of Rs. 25,96,337/- as well as speculative profit of Rs. 2,27,945/- were allocated and belonging to different clients/customers. The assessee has no right to have profit or loss on this equity trading account for the year under consideration. 9.1. We also note that the Assessing Officer vide notice dated 09/11/2018 (i) requested the assessee to furnish the source of investment of Rs. 1.76 crores with proper evidences. In the absence of any evidence why the same should not be added as the total income of the assessee as unexplained investment u/s. 69 of the Act. (ii) requested to submit all the details mentioned in the trading statement provided by the assessee. The assessee responded on 21/11/2018 stating that the total payments to ....