TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 91
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.... possession of information that the assessee made fictitious profits in equity/derivative trading of Rs. 23,30,537/- which has escaped assessment within the meaning of Section 147 of the Act. Therefore a notice u/s. 148 dated 31-03- 2021 was issued to the assessee. 3. In response, the assessee filed her Return of Income on 28-04- 2021 declaring total income of Rs. 99,520/-. The Assessing Officer levied penalty u/s. 271F for not filing the return will within the time limit prescribed u/s. 139(1) of the Act. Further the A.O. issued various notices to the assessee. In response, the assessee filed letter dated 15-12-2021 which reads as follows: "Reply of Point No 3 & 4:- with reference to your observation regarding, we had earned fictitious Profits an equity/derivative trading of penny stock shares of M/s. Pradip Overseas of Rs. 23,30,537/- during the year under consideration. In this regard we have gathered information regarding share traded for the period April 2012 to March 2013 of M/s. Pradip Overseas stock. And as per Investment report available with us, we hereby inform you that during the period from 1st April 2012 to 31st March 2013 we have deal with the same securities and ....
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....ice dated 28-02-2024 was issued to the assessee as to why not revise the reassessment order passed by the Assessing Officer. 6. In response, the assessee filed detailed reply as follows: "2 Assessee didn't file the return of income u/s 139(1) as her income was not taxable. Assessee filed the return of income on 28.04.2021 showing total income of Rs. 99,520/- by showing the income u/s. 44AD of the Act on turnover of Rs. 3,96,731/- in response to notice u/s. 148. The income declared u/s. 44AD is by way of derivative trading in F&O. During the year under consideration, assessee incurred the short term capital loss of Rs. 38,77,898/- which was carried forward. 3. The notice u/s. 148 was issued on 31.03.2021 for taking action u/s, 147 to tax alleged escaped income of Rs. 23,30,537/-, In the reasons recorded it has been mentioned that assessee earned the fictitious profit in equity/derivative trading of Rs. 23,30,537/- which has escaped the assessment. It has also been mentioned in the reasons recorded that assessee has not filed the return of income and therefore action u/s. 147 was taken under clause (a) of Explanation 2 to S. 147. 4. In the course of assessment proceedings,....
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.... After considering the explanation of the assessee filed vide letter dated 15.12.2021, no addition was made. 8. The assessing officer could make the other additions than the reasons recorded u/s. 148(2) only when it comes to the notice of the assessing officer subsequently in the course of the proceedings. In other words in terms of S. 147, the assessing officer can assess or reassess such income as mentioned in the reasons recorded and any other income only when the addition in respect of item mentioned in the reasons recorded is made. The reliance is placed on the decision of jurisdictional Gujarat High Court and Bombay High Court in case of CIT vs. Mohmed Juned Dadani-84 CCH 0064 (Guj.) & CIT vs. Jet Airways (1) Ltd. - 239 CTR 0183 (Bom.) respectively. Accordingly, your action proposing to make the other addition in the notice issued u/s. 263 of Rs. 5,90,69,467/- is not in accordance with the law. 9. Even otherwise, as the notice u/s. 148 was wrongly issued and therefore the reassessment proceedings are not valid. This is because the reasons recorded are factually incorrect. Further the assessee didn't file the return of income as the income was not taxable. When the rea....
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....he Act, but pursuant to the notice issued u/s. 148 on 31-03-2021, the assessee filed her Return of Income on 28-04-2021. The A.O. called for various informations by issuing a notice u/s. 142(1) dated 11-08-2021 and notice u/s. 143(2) dated 12-11-2021 against which the assessee given various details and evidences. The reply dated 15-12-2021 filed by the assessee is already extracted in Paragraph No. 3 of this order. 8.1. After considering the above replies filed by the assessee, the Ld. A.O. held that there is no specific amount of Rs. 23,30,537/- invested in M/s. Pradip Overseas Ltd. as held that in the reasons recorded for reopening of assessment, whereas the assessee earned intraday profit of Rs. 1839 and Short Term loss of Rs. 10,53,688/- on the purchase and sale of Pradip Overseas Ltd. scripts. Thereby the A.O. has not dropped with the reassessment proceedings but assessed the Returned Income filed by the assessee. 9. For the very same reasons recorded for escapement of income, Ld. PCIT reopened the assessment by invoking Section 263 of the Act on the ground that the A.O. has not made necessary enquiries and ought to have taxed the investment of Rs. 5.9 crores made by the ass....