TaxTMI 
TaxTMI 
2026 (1) TMI 942
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....Income Tax (Appeals), (in short "Ld. CIT(A)"), National Faceless Appeal Centre (in short "NFAC"), Delhi vide order dated 14.07.2025 passed for A.Y. 2011-12. 2. The Department has raised the following grounds of appeal: ITA No. 1726/Ahd/2025 (A.Y. 2011-12) "1. Whether on facts and circumstances and in law, the Ld. CIT(A) has erred in deleting addition of Rs. 47,12,212/- made when the assessee has systematically evaded taxes by misuse of the NMCE platform through accommodation entries with the help of entry operators and thereby tried to introduce unaccounted money in the garb of contrived profits/losses? 2. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in ignoring....
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....s and losses, reassessment proceedings under section 147 of the Act were initiated. The Assessing Officer issued notice under section 148 dated 30.03.2018 in response to which the assessee filed return of income on 30.04.2018 declaring total income of Rs. 3,52,080/-. 4.1 During the reassessment proceedings, the Assessing Officer relied upon information received from the Investigation Wing and also obtained details from NMCE by issuing a notice under section 133(6) of the Act. On the basis of the reply received from NMCE, the Assessing Officer held that the assessee had booked contrived and fictitious profits and losses through synchronised and manipulated transactions. According to the Assessing Officer, the assessee had allegedly earned....
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....iples of natural justice. The assessee also alleged that the Assessing Officer had adopted a pick-and-choose approach by treating part of the same transaction as genuine and part as non-genuine, which was impermissible in law. Separate grounds were also raised challenging the levy of interest under sections 234A and 234B and the initiation of penalty proceedings under section 271(1)(c). During the appellate proceedings, the assessee reiterated that all transactions were carried out through the NMCE platform in the normal course of business through a registered broker, that payments were made and received through banking channels, and that she had in fact earned net profit from such transactions which was duly offered to tax. The assessee su....
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....ed as non-genuine while the remaining purchase and the entire sale value were accepted as genuine. The CIT(A) held that such an approach was arbitrary and contrary to settled principles of law, as a transaction must be examined and accepted or rejected as a whole unless supported by cogent evidence. In the absence of any evidence of cash flow, collusion, or manipulation, and considering that all transactions were duly recorded in the books and supported by documentary evidence, the CIT(A) concluded that the addition of Rs. 47,12,212/- had no factual or legal basis. Accordingly, the addition was deleted and Grounds Nos. 1 to 10 were allowed. 5.3 As regards Ground No. 11 relating to charging of interest under sections 234A and 234B and Gro....
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....contrived and fictitious profit/loss arising from commodity transactions carried out on the NMCE platform. The learned Departmental Representative has relied upon the findings recorded by the Assessing Officer in the assessment order, whereas the learned counsel for the assessee has strongly supported the order of the CIT(Appeals) and submitted that the reopening itself proceeded on an incorrect factual premise that the assessee had booked fictitious losses, whereas in reality the assessee had earned profit which was duly offered to tax. 10. On consideration of the facts on record, we find that the CIT(Appeals) has passed a well-reasoned and detailed order after examining the entire material available. It is undisputed that the assessee ....