TaxTMI 
TaxTMI 
2024 (3) TMI 435
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....s. He is also registered as a broker in the Bombay Stock Exchange. He is stated to be a proprietor and Director of M/s. CIFCO Limited and M/s. Food and Inn Ltd from which company he received salary and commission respectively. 3. Appellant is the Income Tax Department. It is their case that Assessee is a notified person under the Trial of Offences Relating to Transactions in Securities Act, 1992 ("TORTS") following his alleged involvement in multicrore securities scam of nineties infamously known as Harshad Mehta Scam. Assessee was investigated by Central Bureau of Investigation, ("CBI") followed by a search and seizure action conducted by the Department. 4. The original assessment was completed after the search operation. Assessee preferred an appeal against the assessment order so passed, before the Commissioner of Income Tax (Appeals) ("CIT(A)"). Both the Department and Assessee aggrieved by order passed by the CIT(A) preferred cross-appeals before the ITAT, which restored all matters to the file of the Assessing officer ("AO") for de novo assessment after requiring the parties to provide all material. Assessment order was passed de novo by the AO under Section 143(3) read....
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....rcumstances of the case and in law the Hon'ble ITAT was right in deleting the addition made by the AO on account of credit balance in the account of M/s. Champaklal Devidas of Rs. 54.13 Lakhs by holding that opening balance cannot be taxed during the year under consideration; without appreciating the fact that the assessee had failed to discharge its onus to furnish detailed explanation with supporting evidences in respect of the opening balance? 6.6. Whether on the facts and in the circumstances of the case and in law the Hon'ble ITAT was justified in deleting the additions made under sec. 68 of the Act by holding that the additions were made by the AO without proper examination of evidences furnished and proper reasoning; without appreciating the fact that the assessee had failed to meet all the three criteria i.e. identity, creditworthiness and geniuses of the transactions? 6.7. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in deleting the addition made by the AO on account of interest expenses incurred for non-business purposes by relying on the decision of the jurisdictional High Court in the case....
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....the date of sale, but covered it by purchasing the same later. This transaction is called 'short selling', quite common in share trading circles. In another illustration, AO alleges that the purchase and sale of shares have been carried out by the same person which Assessee has explained to be a 'badla transaction' also common in the trade circles. Noting these illustrations, the ITAT has decried the AO's finding of these transactions to be bogus transactions without bothering to examine contract notes supporting these transactions. More so since the contract notes were seized by the Revenue and were in the custody of the Department itself. Despite holding crucial evidence sufficient to test the veracity of testing Assessee's explanation, the AO proceeded to hold the transactions as bogus transactions only on the basis of his own perceptions based on conjectures and surmises. The ITAT held the transactions to be sufficiently explained and also observed that the AO not having made any addition of identical nature in the earlier years or subsequent year despite the operation of Assessee being identical in nature for all the years. We find that the entire issue is based on a factual a....
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....paklal Devidas in turn lent the entire sum to some Dhanraj Mills Pvt Ltd. which also transferred the amount to another company called Kennilworth Investment Ltd and other group companies of Assessee himself. The AO concluded this to be an arrangement on paper only and a device used by Assessee to show loss in transactions with Champaklal Devidas only on the ground that Assessee has not paid interest on the loan stated to be availed from Champaklal Devidas. The AO refused to exclude the opening balance of Rs. 54,13,442/- for lack of production of evidence by Assessee. The ITAT has examined this issue and noticed the observation of CIT (A) that the accounts relating to AY 1987-88 were very much available with the AO and hence his observation that there was no evidence was incorrect. Furthermore, the repayment made by Assessee in subsequent years were considered while holding the transaction to be bogus. Most importantly, the ITAT noticed that the assessment of J. P. Gandhi was also done by the same AO and the profits declared by him were all accepted. All the transactions were routed through bank accounts. The mere fact that Champaklal Devidas has not charged interest on the outst....
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....ased on facts in the case and no question of law arises for our consideration. 11. The final issue relates to disallowance of loss on securities transactions. The AO disallowed this claim only on the basis that Assessee has passed general entries to book losses. In the second round of proceedings, the AO changed his reasoning and held that Assessee failed to furnish explanation. The ITAT noticed vouchers relating to transactions filed by Assessee and also that the transactions were by way of account payee cheque only. The AO failed to verify the claim of loss by examining corresponding purchases and sales, the prevailing market rate at the relevant time, the details of the purchasers, etc. The ITAT, thus, held that a conclusion of booking bogus loss cannot be drawn without constructive examination of evidence. The further issue of levy of interest under Sections 139(8) and Section 217 of the Act is consequential and hence, does not require separate adjudication. Thus on all the issues, the ITAT has overturned the directions of AO on facts and appreciation of evidence and material on record. The ITAT has thus rejected the appeal preferred by the Revenue. 12. Mr. Chottaray, lea....