TaxTMI 
TaxTMI 
2024 (9) TMI 139
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....assessment was invalid, illegal and without jurisdiction. It be so held now the reassessment was invalid/ illegal and without jurisdiction. It be so held now. 2. The ld CIT(Appeals) also further erred both in law and on facts in not considering the jurisdictional High Court judgments holding that there was no proper inquiry on the so called information based on which the reopening was initiated and further, on the basis of documents and confirmations furnished 3. The ld CIT(Appeals) also further erred both in law and on facts in not appreciating that when the addition of amount for which reasons was recorded having not been added, no other items of alleged income could be added in reassessment based on binding judgments which he wrongly distinguished . It be so held now and orders passed by lower authorities be quashed. 4. Without prejudice to the above grounds, the ld CIT(Appeals) also grievously erred both in law and on facts in not deleting addition of Rs. 2,55,000/- made by ld A.O. merely on the basis of incorrect information which was later proved to be incorrect. It be so held now and order passed by Id AO be quashed now. The addition is confirmed by ld CIT(A) on untena....
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....sessee. The broker further clarified that one of its staff members, while booking trade on exchange platform, inadvertently entered client code of the impugned the assessee, instead of client code of another client namely Uttam Nakrani HUF. The trades in the script as mentioned in the notice i.e. Nyssa Corporation were eventually settled in the name of Uttam Nakrani HUF. Further, the assessee also submitted that he is CEO of Hindustan Lever Ltd and is a non-resident Indian based in Singapore. He submitted that due to some reporting error or mistake in the manual entry by the broker, his Code had been wrongly attached to these fraudulent transactions. He further submitted letters signed by the client service manager (Wealth Management) for M/s Anand Rathi Wealth Services Ltd wherein it is stated that no transactions were carried out in the Code of the assessee. The assessee further submitted that vide letter dated 22- 11-2019, M/s Anand Rathi has admitted that while uploading a unique client code on exchange platform, at the time of opening the account of the assessee, inadvertently PAN of the assessee was mentioned, instead of the PAN of Uttam Nakrani HUF. The broker further submit....
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.... and he is insisting that these mistakes are genuine mistakes by the broker, This situation goes against the assessee. The broker has also submitted that Anand Rathi is a reputed broker but repetitively making such transactions for thousand times over multiple years do not match the words of the broker. 8.8 At the same time from the details and documents available, it is clear that the assessee has not made any payments or received any payments in his accounts through banking channel for the transactions. Similar is the position about delivery of the shares. The assessee has not given or taken delivery of the shares. Broker notes were not issued in the name of the assessee. In the ledger account of the assessee, these transactions are not reflected. Therefore, the assessee's role is limited for providing its PAN for all such transactions which include certain manipulated scrips in lieu of certain payments. In similar cases, normally the name provider charge @2% of the transaction value. In this case, the assessee is not required to incur any expenses but to provide his high net worth PAN number without any objection. Therefore, assessee's income from such transactions are....
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....h line of business, as found in certain cases by the Ld. Assessing Officer). Therefore, on going through the instant facts, we observe that it is not a case where no additions were made in the hands of the assessee in respect of purchase/sale of shares of Nyssa Corporation, but the assessing officer, on consideration of the facts of the case, had come to the conclusion that though the assessee had not taken actual delivery of such shares of Nyssa Corporation, however the assessee's role was that of providing its PAN for transactions involving purchase and sale of shares of Nyssa, in exchange of certain payments, computed at 2% of the transaction value. Accordingly, in our considered view, this is not a case where no addition had been made in the hands of the assessee in respect of purchase/sale of shares of Nyssa Corporation, in which case, we could have considered the applicability of judicial precedents cited by the assessee. However, from the contents of the assessment order, which were also later confirmed by Ld. CIT(Appeals), it is observed that with respect to the very same script i.e. Nyssa Corporation, the assessing officer had in fact made certain additions in the hands of....
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....d that the Department has not brought forth any corroborative evidence or basis for arriving at the conclusion that the assessee had fraudulently lent his PAN for carrying out such transactions and further, there is no basis as to how the assessing officer arrived at the rate of 2% of such transactions. The assessing officer as well as Ld. CIT(Appeals) has simply ignored the letters filed by the brokerage firm, who have also confirmed that the assessee was not engaged in purchase/sale of shares of Nyssa Corporation, which were summarily ignored by the Tax Authorities. 8. In response, Ld. DR placed reliance on the observations made by the assessing officer and Ld. CIT(Appeals) in their respective orders. 9. We have heard the rival contentions and perused the material on record. So far as the merits of the case are concerned, we agree with the counsel for the assessee that the Department has not brought anything on record to substantiate that the assessee was engaged in earning commission, stated to have been calculated at the rate of 2% on the value of transactions of penny stock companies shares viz. Nyssa Corporation. Evidently, during the course of assessment proceedings, the a....