TMI Blog2022 (10) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... to the above. The assessee shall also be at liberty to file rejoinder, if any, in reply to the report/response of the AO. Needless to mention that no order shall be passed without affording opportunity of hearing to both the sides. Accordingly, grounds raised by the Revenue are allowed for statistical purpose. - ITA No.1793, 1794, 1795/Mum./2022 - - - Dated:- 11-10-2022 - Shri Pramod Kumar, Vice President And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : None For the Revenue : Shri Lovish Kumar ORDER PER SANDEEP SINGH KARHAIL, J.M. The present batch of three appeals have been filed by the Revenue challenging the separate orders of even date 04/04/2022, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by learned Commissioner of Income Tax (Appeals)-57, Mumbai [ learned CIT(A) ], for assessment years 2010 11 and 2011 12. 2. The appeals being ITAs No. 1794/Mum./2022 and 1795/Mum./2022 are against impugned orders passed by the learned CIT(A), which in turn, arose from orders passed by the Assessing Officer ( AO ) under section 147 r/w section 144 of the Act, for assessment years 2010 11 and 2011 12. While, appeal being I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground(s) be set aside and that of the Assessing Officer be restored. 6. The brief facts of the case are: The assessee was a resident of USA. In India, the assessee was registered with Securities and Exchange Board of India ( SEBI ) as a sub-account of Foreign Institutional Investor ( FII ) to undertake investment in accordance with SEBI (FII) Regulations, 1995. For the assessment year 2010 11, assessee has not filed its return of income. Since the case of the assessee was appearing as non-filler under NMS for assessment year 2010 11 and information was available with the Department that share transactions were made by the assessee in the relevant financial year, letter was issued to the assessee for verification of information available with the Department. However, no response was received from the assessee. Consequently, the case of the assessee was reopened after recording reasons and notice under section 148, was issued and sent by speed post. But the said notice was returned unserved and ultimately the notice under section 148 of the Act was served by affixture at the last known address of the assessee. Thereafter, notice under section 142(1) was also issued to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Compliance-India and Head of Operations of the aforesaid broker viz. Macquarie Capital Securities (India) Private Limited. The said summons was duly responded by the concerned persons of the Broker Company and details / affidavit was filed. After considering the affidavit of Director of the broker company, the learned CIT(A) vide impugned order came to the conclusion that no trade was booked in the name of the assessee during the year under consideration and accordingly addition made by the AO was directed to be deleted. The relevant findings of learned CIT(A), in this regard, are as under: 5.1.6 To resolve the issue, summons us 131 were issued to Macquarie Capital Securities (India) Pvt. Ltd. Ms. Ganjal Mehta (Head of Compliance-India) and Shri Sanjay Gupta (Head of Operations) attended on behalf of Macquare Capital Securities (India) Pvt Ltd. 5.17 Before me, they submitted as under: 1. No trade under inquiry was done on behalf of Principal Investors Fund Growth Fund (A) (assessee) 2. Details of any trade on behalf of 'A' will be furnished by 30.03.2022 3. Why the PAN of 'A' was used:- they stated that one PAN is used for a group enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be trading India with Standard Settlement Instructions (SSIs) along with PAN details or we would extract SSI details of the client group's sub accounts from a global system - DTCC Alert. The PAN of any one of the given / available accounts is required to be mapped while registering a UCC or trading code of that group Typically, UCC of the Parent Group would be mapped to the first sub account of the group opened with us based on SSI. Subsequently that trading code is used for as long as the group has an active relationship with the Stockbroker. On a routine basis there is no information flow either form custodian or exchanges or client on surrendered /cancelled FIL/FPI accounts that could be used for checking the status of any mapped accounts. However, on an exception basis the Stockbroker may come across the fat that an account has been deactivated or surrendered when it encounters a mismatch between a client's allocation details and the custodian's details (although this scenario is not commonly encountered). Execution On receipt of an order from a client, we (the broker) execute the order under the relevant UCC code assigned to the Parent group that was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied that no trade on behalf of the assessee are carried out during the year. 5.1.13 The A.O. is therefore, directed to delete the addition totalling Rs. 16,36,86,460/-. Being aggrieved, the Revenue is in appeal before us. 8. We have considered the submission of the learned DR and perused the material available on record. It is, inter-alia, the plea of the Revenue that though additional evidence filed by the assessee was provided to the AO for its comment and remand report in response thereto was also filed by the AO, however, the learned CIT(A) thereafter also issued summons under section 131 of the Act to the Head of Compliance-India and Head of Operations of broker company and certain more information/documents were furnished pursuant thereto. As per the learned DR, neither an opportunity of cross examination of the concerned persons of broker was granted nor were information/documents furnished pursuant to summons under section 131 of the Act provided to the AO, on the basis of which impugned addition was deleted by the learned CIT(A). From the perusal of findings of learned CIT(A), as noted above, we find merits in the submission of the learned DR. 9. We find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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