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TMI Blog2023 (4) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds. 2. That the reassessment order passed by the Ld. AO deserves to be quashed as void ab initio since the same was passed without issuing any notice u/s 143(2) of the Income Tax Act, 1961. 3. That under the facts and circumstances of the case, an addition of Rs.20,18,500/- made by the Ld. AO and subsequently confirmed by the CIT(A) deserves to be deleted. 4. Without prejudice to above and under the facts and circumstances of the case, an addition of Rs.20,18,500/- amounts to double addition and the same deserves to be deleted. 5. That under the facts and circumstances of the case, disallowance of carried forward loss amounting to Rs.40,87,460/- from previous year by the Ld. AO is illegal and unjustified. 6. That without prejudice to above and under the facts and circumstances of the case, directions given by the Ld. CIT(A) to the Ld. AO for verification of carried forward loss amounting to Rs.40,87,460/- was beyond the powers given u/s 251 of the Income Tax act, 1961. 7. That the appellant craves leave to add, amend, alter or withdraw any ground of appeal at the time of hearing with the permission of the Hon'ble ITAT, Delhi Bench." 3. The Ld. Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to the extent of Rs.20,18,500/- had escaped assessment and hence, notice u/s 148 of the Act was issued on 28/03/2017. The main case of the AO is that income of the assessee has escaped assessment to the tune of Rs.20,18,500/- by way of shifting in ascertained loss of Rs.10,09,250/- as appearing in the details supplied by the ADIT (I&CI), New Delhi has been suppressed in the books of accounts of the assessee with the connivance of the share broker in consideration of commission paid therein in cash to the brokers. Accordingly, the case of the assessee was reopened u/s 147 of the Act after obtaining the prior approval of the Pr. Commissioner of Income tax, New Delhi. In response to the notice issued u/s 148 of the Act, the assessee vide letter dated 20/04/2017 submitted that the return already filed on 13/10/2010 may be treated as return in response to notice u/s 148 of the Act. The assessee sought for reasons recorded for reopening the assessment. The Ld. AO supplied copy of the reasons recorded to the assessee vide letter dated 05/07/2017 which reads as under: "During the course of survey operation in the case of M/s Integrated Master Securities Pvt. Ltd. the statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledger account of IMSPL as appearing in the books of accounts of the assessee to drive home the point that the two entries mentioned in the AO letter representing loss figure of Rs.1,07,420/- and Rs.9,01,830/- does not figure in the said ledger account. Vide letter dated 02/11/2017 the assessee filed detailed reply before the Ld. AO clearly objecting to the entire re-opening made in this case by reiterating all the relevant facts on record available with him together with the relevant books of accounts. The assessee also explained the modus operandi of Future and Options (F & O) transactions carried by him together with the ledger account of the broker. The assessee categorically denied having taken any fictitious loss from the said broker which was also evident from the fact that no loss figure reflected in the ledger account of the IMSPL. The assessee also sought for approval in terms of section 151 of the Act. The assessee also stated that all the details that were called for by the ld. AO in the notice issued u/s 142(1) of the Act, were duly submitted already to the extent available with the assessee. The assessee once again requested vide his letter dated 02/11/2017 to produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igure of Rs.1,70,650/- has been inadvertently mentioned in the reasons. In the said letter dated 28.11.2017, the Ld. AO stated that the correct figure is Rs.10,09,250/- which had escaped assessment. The ld. AO also gave the details of the same containing the broker code, broker name, original client code, original client PAN, original client name, profit/loss to original client because of client code modification, modified client code, PAN of modified client, modified client's name and the profit or loss to modified client because of client code modification. The assessee filed a letter dated 04/12/2017 in response to the letter issued by the Ld. AO dated 28/11/2017. In the said letter dated 04/12/2017, the assessee again objected to the validity of reopening by taking shelter from various case laws including the decisions rendered by the Hon'ble Jurisdictional High Court. 7. The ld. DR argued that the letter dated 28/11/2017 issued by the ld. AO represents the order passed by him disposing of the objections raised by the assessee for reopening. In the said order/letter dated 28/11/2017, the Ld. AO categorically states that the correct figure of income escaping assessment is Rs.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions to the tune of Rs.73,40,121/- and had not incurred any loss at all. Hence, there is absolutely no claim of loss of Rs.10,09,250/- by the assessee in his F&O Segment, whether fictitious or otherwise. This fact was not even verified by the Ld. AO while recording reasons for formation of belief that income of the assessee had escaped assessment. Hence the reasons recorded by the Ld. AO does not have live link to form a belief that income of the assessee had escaped assessment. Similar is the case of Ld. Addl. CIT/Ld. PCIT while according their respective approvals u/s 151 of the Act. (g) Hence, it could be safely concluded that reasons recorded for reopening of the assessment were made on incorrect assumption of fact. (h) IMSPL had directly responded before the Ld. AO in response to the summons issued by the Ld. AO to IMSPL. In the said letter, IMSPL had indeed stated that client code modifications are permitted to be made by any broker as authorized by SEBI and Stock Exchange within the permitted time after the closure of the stock market to rectify human punching errors. Despite this, the Ld. AO had not even bothered to first ensure as to whether there was any cli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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