TaxTMI 
TaxTMI 
2025 (1) TMI 91
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....or the Asst. Year 2013-14. The Revenue was in 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....
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....derassessment of income of Rs. 5,90,69,497/-. Therefore a show cause notice 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 un....
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....ip Overseas. No material has been brought on record against this explanation filed in the course of assessment proceedings. 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 reason....
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....the materials available on record including the Paper Book filed by the assessee. It is undisputed fact that the assessee has not filed original Return of Income u/s. 139(1) of the 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 t....
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....framed by the A.O. is not sustainable in the eyes of law. Therefore any consequential Revision proceedings thereon to revise the assessment is unsustainable in law and deserves to be quashed as held by the Delhi High Court in the case of CIT Vs. Software Consultants reported in [2012] 21 taxmann.com 155 wherein it was held as follows: "Section 263, read with sections 147 and 148, of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 1993-94-Assessee did not file its return. Later on it was discovered that assessee had made certain undisclosed investments in FDRS In compliance of notice under section 148 assessee filed its return declaring a loss - In course of proceedings under section 147, it was noted that assessee had shown in its profit and loss account a substantial increase in share application money In order to confirm genuineness of share application money summons were issued to alleged share applicants Finally assessment order was passed by accepting return of loss and holding that assessee was able to establish and prove source and capacity to invest in FDRs Commissioner, however, exercising its revisionary jurisd....