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TMI Blog2025 (5) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... fictitious transaction, and after following due procedures for reopening. 2. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in cancelling the order without appreciating the fact that the assessee has traded in Currency derivative through the broker viz. Ashlar Securities Pvt Ltd. to book bogus loss and not in the share of Ashlar Securities Pvt Ltd. as observed by the Ld. CIT(A) 3. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in cancelling the order without appreciating the fact that the case of the assessee was part of PROJECT FALCON which was carried out by the Investigation Wing/BSE/SEBI to unearth tax evasion scam in F&O derivative segment. 4. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in cancelling the order without appreciating the fact that in the case of Rakhi Trading Pvt Ltd, the Apex Court has rendered the decision in favor of SEBI and held that such transactions have been done mainly to avoid taxes." 3. Exactly similar grounds have been raised in A.Y. 2015-16 also. We will first discuss the appeal for the A.Y.2014-15. 4. The assessee had filed her return of income on 28/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lysis of details available on records, it is noticed that the genuineness of the said transactions is not conclusively proved. Hence, I have reasons to believe that income chargeable to tax more than Rs. 1,00,000/- has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for that assessment year i.e. for the subject A.Y. within the meaning of section 147 of the Income-tax Act, 1961. 6. In response to the notice, assessee has filed her objection which has been disposed of by the AO. Again assessee submitted a detailed reply vide letter dated 15/03/2022 which has been incorporated in the assessment order from pages 2-5. The ld. AO however, rejected the same and has discussed history and background of practices carried out for tax evasion through trading illiquid derivatives. He has quoted some SEBI order dated 28/09/2017 wherein SEBI has imposed some kind of penalty. Nowhere, from the assessment order it is seen that for which scrip and on what issue SEBI had imposed penalty whether it had some kind of connection with the assessee, because ld. AO has quoted the SEBI order through some internet search. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that assessee has resorted to some suspicious mode of obtaining the gains and not offering the income to tax by not showing the details of income or claiming non allowable deduction. How he has arrived at conclusion that the income related to some kind of transactions remains undisclosed which is required to be considered in computing total income of the assessee. All this are his bald allegation and complete non-application of mind on the information coming on record and the facts and material of the assessee already on record, that, firstly, already assessment u/s. 143(3) was completed and the computation of income and nature of income already stood scrutinized; secondly, neither the assessee has shown any long term capital gain or loss which has been claimed as exempt; and lastly, there was no such suspicious mode adopted of obtaining the gains which has not been offered to tax. Assessee has disclosed profit and loss from derivative trading, currency derivatives, commodity derivatives and F & O done in regular course of business which she is carrying out year after to arrive her computation of income. AO did not even verify the profit and loss account or computation of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and recording of reasons and used template/proforma." Thereafter, ld. CIT (A) has quoted several decisions and finally concluded as under:- "From the above discussed judicial pronouncements, it is clear that there must be opaque and correct facts in the reasons for reopening the assessment. In this case, the reasons are not only vague but also incorrect. Though the AO proceeded on vague facts, as is noticed from the reasons, he disposed of the objections, raised by the appellant against the reasons by mentioning specific facts related to income escapement due to fictitious loss by trading in currency derivatives. He did not submit different proposal to his higher authorities by mentioning specific reasons and obtained their sanction before issue of notice u/s 148 of the Act. He just revised the reasons while disposing objections of the appellant. This vitiates the reassessment proceedings. When initiation/start is wrong what follows is also wrong. Since initiation of reassessment proceedings was based on vague and incorrect facts, the Order is void ab-initio. The Order is, therefore, cancelled." 13. Since there was no co-relation between the reasons to believe as record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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