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2023 (2) TMI 959 - AT - Income TaxReopening of assessment u/s 147 - Addition u/s 68 - HELD THAT:- We fail to find any merit since ld. AO has reopened the proceedings after validly recording the reasons based on the information received from the investigation wing and had reason to believe for reopening of the case regarding the transactions of the sum received by the assessee from the alleged accommodation entry provider. We, thus, dismiss the legal ground raised by the assessee in ground nos. 1 & 2. Addition u/s 68 - The assessee broker after opening the client’s account has been approached by the above referred three clients for purchase of shares. For making the said purchase amounts have been transferred to the client’s bank account which is specifically used for purchasing the shares and the disbursement from such account has to go either to the stock exchange or is returned back to the client. There is no authority with the broker to utilize such amount for its own purpose. The assessee broker duly received the amount and initiated the transactions for purchase of the share on the stock exchange and the quantities desired by the client was received in parts as and when the seller was available. All the equity shares so purchased first came in the Demat account of the assessee broker and then has been transferred to the client’s Demat account. No discrepancy in these transactions and the alleged cash credits are nothing but an advance sum received for purchase of equity shares and the said transaction has been duly completed and brokerage for carrying out such transaction has been charged by the assessee and therefore, no addition is called for u/s 68 of the Act. As decided in SMT. HARSHILA CHORDIA VERSUS INCOME-TAX OFFICER [2006 (11) TMI 117 - RAJASTHAN HIGH COURT] both the lower authorities failed to appreciate the case of the assessee that these were the trade advances and not cash credits and against such advance, the assessee has supplied the material in due time as per details available on record - Based on this finding addition u/s 68 of the Act was deleted. We, thus, reverse the finding of ld. CIT(A), delete the addition made u/s 68 of the Act and allow the effective ground raised by the assessee on merits.
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