TaxTMI 
TaxTMI 
2025 (2) TMI 1727
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....T, the revisionary jurisdiction under section 263 of the Act was exercised by the ld.Pr.CIT on the assessment order passed in the case of the assessee for the impugned assessment year under section 147 of the Act, on noting from the record that the despite the assessee having made huge transactions of purchase and sale of equity shares and derivative trading, the AO had not verified the issue totaling in all to Rs. 75,78,885/-. The ld.Pr.CIT notes that the reopening was resorted to for the same reason that the financial transactions of the assessee by way of purchase and sale of equity shares and derivative trading, amounting to Rs. 75,78,885/- which was found not commensurate with the return of income filed by the assessee, had escaped assessment. But as per the ld.Pr.CIT, the AO despite information in his possession failed to verify this issue, and accordingly, he assumed jurisdiction under section 263 of the Act to revise the order of the AO. 4. Due reply was filed by the assessee to the Ld.PCIT during revisionary proceedings, stating that the issue was duly examined during the assessment proceedings. It was also pointed out by the assessee that the ld.Pr.CIT had found error ....
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....tentions and gone through the order of the ld.Pr.CIT, as also various documents placed before us in the form of paper-book compilation. The notice issued by the ld.Pr.CIT for assuming jurisdiction to revise the order of the AO, which was placed before us at PB Page NO.1 and 2 reveals that the ld.Pr.CIT derived from the records of the assessee that the reopening assessment proceedings under section 147 of the Act had been undertaken on the assessee, on the information that the assessee had made huge transaction in penny stock scrips/equity/derivatives and subsequently claimed bogus long term capital loss to accommodate unaccounted money/income by way of reverse trade mechanism in option derivate trading. 9. That despite so, the AO had not properly verified or investigated the issue while completing assessment proceedings under section 147 of the Act. The ld.Pr.CIT notes that the transaction so undertaken by the assessee amounting to Rs. 75,78,885/- and addition of the same ought to have been made to the income of the assessee under section 69 of the Act. The failure on the part of the AO to properly verify this issue of the assessee having accommodated unaccounted income in its b....
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.... dated. 31.03.2022, without proper verification of the facts/details stated in the information and reasons for reopening the case. Thus, the information/ reasons that the assessee has made huge transactions in penny stock scrips Equity/Derivatives) and subsequently claimed bogus Long Term Capital Loss or Short Term Capital Loss to accommodate unaccounted money/income by way of using reverse trade mechanism in option derivative trading, has not been properly verified/investigated by the AO while completing the assessment proceedings vide order u/s. 147 r.w.s. 144B of the Act dated. 29.03.2022. Thus, the AO has failed to verify the issue and also failed to make addition u/s. 69 of the Act, as per the information/investigation report, in respect of the transaction of Rs. 75,78,885/-. Thus, there is underassessment income of Rs. 75,78,885/- and non levy of tax of Rs. 24,58,968/- and applicable interest. Since the above issue was not verified while finalizing the assessment order, the assessment order passed is erroneous in so far as prejudicial to the interest of revenue. Therefore, action u/s. 263 of the Act is proposed in this case. In case you have any objection to....
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...., the details of STT paid by the assessee, ledger account of the assessee in the broker's book, copy of the contract note of the transaction, and the transaction details of the equity or derivatives done by the assessee (PB Page no.31). * Our attention as also drawn to the reply filed by the assessee placed at PB Page no.32 to 47, pointing out there from that the assessee had submitted to have no DEMAT account and the trading activity carried out of F&O transaction through Kayan Securities and paid to STT to the brokers on the transactions entered into. It was also pointed out that all necessary evidences in relation to the transactions being, the copy of the ledger account of the broker, copy of the contract notes of the transaction, and copy of the statement showing contract-wise profit earned. * From the copy of the statement showing contract-wise profits placed at PB Page No.46, it was pointed out that the transaction entered into by the assessee had resulted into profits earned of Rs. 75,78,885/-, and all of which had been disclosed in the P&L account of the assessee. * The ld.counsel for the assessee also pointed out that all these facts, relating t....
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....ious submission dated 06/02/2024 to your good self also. The net profit at the year-end is a result of all the business transactions carried out during the year. We have not set off any carried forward losses, short term / long term capital losses as alleged by your honour Further, the Ld. A.O. has verified all transactions of F & O derivative as per reason recorded before issuing the notice u/s 148 of the Act." 12. A bare perusal of the above would reveal that the assessee had sufficiently demonstrated to the ld.Pr.CIT the facts relating to the issue that the assessee had booked profits of Rs. 75,78,885/- and had not claimed any set off of any loss against the same, and returned all profits to tax by disclosing the same in its P&L account; that the assessee had only set off depreciation against the same, and no loss. The assessee also demonstrated all these issues to have been brought to the notice of the AO also. 13. Having noted so, we find that the ld.Pr.CIT while arriving at his finding of the error of the AO has not dealt with any of the contentions made by the ld.counsel for the assessee. A bare perusal of the finding at page no3 of his order would reveal this fact. Th....