TaxTMI 
TaxTMI 
2026 (8) TMI 1648
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....igation Wing, Mumbai. It was stated that Shri Naresh Jain was engaged in providing accommodation entries in the nature of bogus long-term capital gains/losses and other speculative profits/losses through various penny-stock scrips to several beneficiaries across the country. The assessee was alleged to be one of the beneficiaries of such accommodation entries. Proceedings under section 148A of the Income-tax Act, 1961 ("the Act") was thereafter initiated and an order under section 148A(d) was passed, pursuant to which notice under section 148 of the Act was issued to the assessee. In response to the notices issued by the Assessing Officer, the assessee denied having earned income of Rs. 3,31,27,662. However, according to the assessee, its submissions were not properly considered and the Assessing Officer proceeded to make an addition of Rs. 3,31,27,662 to the returned income. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), National Faceless Appeal Centre, Delhi. Before the learned CIT(A), the assessee submitted that it was a regular trader in shares and securities and had undertaken transactions in more than 1,000 scrips during t....
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....Authority. iii. If Reopening is within three years as stated in the order dated 28th April, 2022 passed under section 148A(d) of the I.T. Act, then how the provisions of section 149 (1) (b) are attracted. iv. Proper Approval of the Specified Authority under section 151 has not been obtained as reopening is within the time limit as per section 149 (1) (b) of the Act, as stated in the said order passed under section 148A(d) of the Act v. Inconsistencies in the facts with regard to basis of reopening of assessment compared with the findings in the Assessment Order vi. Neither the Assessing Officer has provided to the Appellant his proposal to the Specified Authority nor has provided to the Appellant the approval of the Specified Authority. 3. The Ld. CIT (A) erred in law and on facts in not appreciating the fact that reopening of assessment was made by the Assessing Officer merely on the basis of statement under section 132 (4) of the Act recorded at the back of the Appellant of one Mr. Naresh Jain during search and seizure action on him during which he stated that he and his Associates were engaged in price rigging on stock exchange and pr....
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.... Ld. CIT (A) be modified accordingly". 5. At the time of hearing, the learned Authorised Representative ("ld. AR") submitted that Ground Nos. 1 to 3 were not pressed. Accordingly, Ground Nos. 1 to 3 are dismissed as not pressed. 6. Ground Nos. 4 to 8 relate to the addition of Rs. 3,31,27,662 made by the Assessing Officer and confirmed by the learned CIT(A). The ld. AR submitted that the assessee is a regular trader in shares and securities and had undertaken transactions in more than 1,000 scrips during the relevant assessment year. It was submitted that the transactions in the five disputed scrips did not result in the alleged exempt income of Rs. 3,31,27,662 and that the net gain arising from these five scrips was only Rs. 1,09,030, which had duly been accounted for and offered to tax in the return of income. 7. The ld. AR further submitted that the assessee had not declared any exempt income of Rs. 3,31,27,662 in its return of income and that the said figure had been erroneously adopted by the Department. In this regard, the ld. AR referred to the return of income and computation of total income and submitted that no income had been claimed as exempt under section 10(38....
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....,24,431 - 2,33,459 1,09,029 8. According to the details furnished, the assessee had incurred losses in respect of three scrips, namely Alankit, EML and Oasis, whereas the remaining two scrips resulted in profits. The ld. AR also took us through the books of account forming part of the paper book and submitted that the transactions were duly recorded therein and were supported by contract notes, bank statements and stock-broker entries. 9. The ld. AR accordingly contended that the impugned addition had been made on the basis of an erroneous figure adopted from the Investigation Wing report, without examining the actual transactions undertaken by the assessee and the corresponding entries in its books of account. It was submitted that there was no material on record to establish that the assessee had received any accommodation entry or had introduced its own unaccounted money in the guise of share transactions. 10. The learned Departmental Representative ("ld. DR"), on the other hand, relied upon the orders of the Assessing Officer and the learned CIT(A). The ld. DR submitted that the Investigation Wing had unearthed a modus oper....
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....ips. As per the material placed on record, the total sale value relating to the aforesaid five scrips is Rs. 2,69,39,090, as against the figure of Rs. 3,31,27,662 adopted by the Assessing Officer. The assessee has further demonstrated that the net income arising from these transactions was only Rs. 1,09,030. 13. We find that the books of account and supporting documents placed before us contain details of the relevant transactions and are supported by contract notes, bank statements and stock-broker entries. The assessee has also furnished script-wise details showing the purchase and sale transactions and the resultant profit or loss. Significantly, the Department has not pointed out any specific defect in the books of account or in the supporting documentary evidence so as to establish that the transactions recorded therein were fictitious or otherwise not genuine. We further find that the assessee's contention that it had not claimed any exemption under section 10(38) of the Act in respect of the alleged amount of Rs. 3,31,27,662 is supported by the return of income and computation of total income placed on record. Therefore, the premise that the assessee had earned a larg....
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....t the transactions were duly recorded in the books of account and that the resultant profit or loss was accounted for. The Department has not brought any material on record to disprove the said factual position. On the contrary, the details placed before us indicate that the transactions in three of the five scrips resulted in losses and that the overall net result was a profit of only Rs. 1,09,030. 16. We further note that the assessee has brought to our notice an order of the Tribunal in its own case for an earlier assessment year, wherein, according to the assessee, similar transactions were examined and relief was granted. We have also perused the said order in ITA No. 8905/Mum/2025 dated 28.04.2026 for Assessment Year 2012-13. As per the said order, the Tribunal recorded a finding that the profits and losses arising from the relevant transactions had been duly disclosed in the financial statements and return of income. While it is a settled principle that each assessment year is a separate unit of assessment and the doctrine of res judicata does not strictly apply to income-tax proceedings, a finding rendered in the assessee's own case on materially similar facts is cer....