TaxTMI 
TaxTMI 
2024 (4) TMI 1412
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....on received. 1.2. That on the facts and circumstances of the case and in law the Ld. NFAC has failed to appreciate that the recorded reasons stated that the assessee has made a fictitious profit, whereas the assessee has the recorded reasons suggests a loss, and the addition is made on capital gains, hence the issue of reassessment notice and assessment order is bad in law. 1.3. The Ld. NFAC failed to appreciate that the case laws relied on the NFAC do not apply to the facts of the appellant and the case laws are relied on without giving an opportunity to the appellant to respond, hence the order is bad in law. 2. Impugned addition of Rs. 9,09,787/- a short term capital gain is bad in law. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in making an addition of Rs. 9,09,787/- as short term capital gain. 2.1. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in making an addition of Rs. 9,09,787/- as short term capital gain without providing the details of the said amount arrived by the National Faceless Assessment Centre. 2.2. That on the facts and circumstances o....
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....). The CIT(A) confirmed the additions. The assessee is in appeal before the Tribunal. 3. The ld. AR submitted that the assessee was not provided with the complete information based on which the case of the assessee was reopened under section 148 of the Act. The ld. AR further submitted that the assessee has not entered into the alleged transactions mentioned in the recorded reasons and therefore, requested the AO to provide details of the same. The ld. AR also submitted that since the assessee was never provided with the details of the transactions as mentioned in the reasons recorded, the assessee could not submit any details to counter the allegations made in the reasons recorded. The ld AR therefore argued that the reassessment done without providing proper information to the assessee is not valid. The ld. AR in this regard relied on the following decisions: (i) Mohan Thakur Vs. ACIT, ITA No. 1434-37/Mum/2018 dated 01.03.2021. (ii) Kishin Chand Chellaram Vs. CIT (1980) 125 ITR 713 (SC). 4. The ld. AR submitted that the reasons recorded are on the basis of incorrect information and without application of mind. In this regard the ld. AR drew our attention t....
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....ssment is extracted below: 7. The assessee filed objections before the AO requesting to give details of figures mentioned in the alleged fictitious transactions with M/s Anand Rathi Commodities Ltd. The assessee had stated that the figures mentioned in the reasons recorded are not matching with any transaction entered into with M/s Anand Rathi Commodities Ltd. and therefore, unable to counter the allegations mentioned in the reasons recorded. It is also noticed that the assessee has found the sale transaction mentioned in the reasons recorded to be matching with one of the transactions entered into with M/s Anand Rathi Commodities Ltd. from which the assessee has made a profit to the tune of Rs. 17,273/-. However, the AO did not accept the submissions of the assessee and proceeded to complete the assessment by making an addition of Rs. 9,09,787/- from the alleged fictitious transactions as STCG in the hands of the assessee. The relevant findings of the AO in this regard are extracted below: "3. Therefore the assessment is completed u/s.143(3) r.w.s 147 on the basis of material available on record. The assessee has entered into fictitious share transaction within the nam....
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....ng an addition of Rs. 9,09,787/-. 8. Before the CIT(A) also the assessee made similar submissions and requested for the details of alleged transactions as mentioned in the reasons recorded. However, the CIT(A) did not consider the submissions of the assessee and confirmed the addition made by the AO. The main contention of the assessee is that the complete information with regard to the alleged fictitious transactions are not provided to the assessee and that the reopening is based on the incorrect information that the assessee has made loss from the alleged transactions. For the purpose of considering the legal contentions of the assessee we will first look at the relevant provisions of section 147 of the Act as applicable to the year under consideration - If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depr....
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.... reopening assessment be held to be valid in the eyes of law. Further, we have to bear in mind that, when the validity of re-opening of an assessment is tested, the reasons recorded by AO for re-opening the assessment needs to be tested on a standalone basis. Nothing can be added nor anything be deleted from the reasons so recorded by AO. No inference can be allowed to be drawn on the basis of reasons not recorded by him. AO has to speak through the reasons so recorded by him. The reasons recorded should be self-explanatory and should not keep the assessee guessing for reasons. Reasons provide the link between conclusion and evidence. So the reasons recorded by the AO before re-opening as it is, should be examined to see whether AO had met in the "reasons recorded", the essential condition precedent to do so i.e. "Reason to believe, escapement of income" (Refer decision of Hon'ble Bombay High Court in the case of Hindustan Lever Ltd. (268 ITR 332). 10. In the back drop of the above legal position, now we will look at the assessee's case for the year under consideration. From the perusal of the reasons recorded which is extracted in the earlier part of this order, we notice t....