SMT. NEERA MATHUR, JAIPUR V. INCOME TAX OFFICER, WARD-2-1, AJMER

ITA 1463/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9899 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-03-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 18-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANURADHA JCIT DHK
• Assessee Lawyers: P C BAFNA
• Keywords: Reopening of assessment; Reason to believe
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1463/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 SMT. NEERA MATHUR, 52/31, SHIPRA NATH, NEAR METRO MAS HOSPITAL, MANSAROVAR, JAIPUR (RAJ). CUKE VS. I.T.O., WARD 2(1), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADOPM 3653 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. BAFNA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : MS. ANURADHA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19/03/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/03/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), AJMER DATED 03/10/2018 FOR THE A.Y. 2009- 10 IN THE MATTER ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR RE OPENING OF ASSESSMENT AND ALSO FOR ADDITION OF RS. 1,74,873/-. ITA 1463/JP/2018 NEERA MATHUR VS. ITO 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN TRADING O F SHARES AND INCOME FROM OTHER SOURCES. THE ASSESSMENT WAS REOPENED ON T HE BASIS OF INFORMATION THAT THE ASSESSEE HAS REDUCED ITS PROFI T BY RS. 1,74,873/- BY WAY OF CLIENT CODE MODIFICATION. FROM THE RECORD I F OUND THAT DURING THE PERIOD UNDER CONSIDERATION THE ASSESSEE HAS CARRIED OUT F & O TRANSACTIONS ON APPROX 113 DAYS IN A YEAR. THERE WERE 56 ITEMS OF LOSSES AMOUNTING TO RS. 1,07,23,049.64 AND 57 ITEMS OF PROFIT AMOUNTED TO RS. 1,19,28,574.12. THE TOTAL TURNOVER OF PROFIT A ND LOSS WAS RS.2,26,51,623.00. COPY OF LEDGER ACCOUNT STOCK BRO KER WAS ALSO FILED BEFORE THE LOWER AUTHORITIES. THE A.O. HAS DOUBTED AB OUT ONLY ONE TRANSACTION OF LOSS OF RS. 1,74,873/-. THE ASSESSEE CLIENT CODE MODIFICATION WAS LESS THAN 0.77% OF THE TOTAL TRADES CARRIED OUT BY THE BROKER DURING THE YEAR. THUS, THE ERROR IS WITHIN THE LIMIT OF THE REASONABLE MARGIN AS PER THE NSE/SEBI CIRCULAR AND THEN SUCH AN ERROR WHICH IS RECTIFIED BY THE BROKERS AS PER THE FACILIT Y OF CLIENT CODE MODIFICATION CANNOT BE HELD AS MISUSE AND BOGUS TRA NSACTIONS. IT IS MERELY A RECTIFICATION EXERCISE WHICH CORRECTS THE T RANSACTION WHICH WAS WRONGLY PUNCHED IN THE HAND OF THE CLIENT FURTHERMOR E, I FOUND THAT NOWHERE, THE ASSESSING OFFICER HAS GIVEN ANY FINDING THAT THE ASSESSEE AND THE OTHER PARTIES FROM WHOSE ACCOUNT, THE TRANSA CTIONS ARE TREATED ITA 1463/JP/2018 NEERA MATHUR VS. ITO 3 AS TRANSFER OF LOSS ARE IN COLLUSION ALONGWITH THE B ROKER. ONCE THE PARTIES ARE INDEPENDENT AND HAVE NO RELATION THEN DOING SUC H TRANSACTION WITHIN SUCH LIMITED WINDOW PERIOD OF HOUR AFTER TRADING HO URS IS NOT POSSIBLE. I ALSO FOUND THAT THE CLIENT M/S SANDEEP STOCKS PVT. LTD. WHOSE CODE WAS MODIFIED ARE NOT RELATED TO THE ASSESSEE. N ORMALLY THE QUESTION OF SHIFTING OF LOSS WOULD ARISE BETWEEN THE RELATED PARTIES ONLY. ACCORDINGLY, I DO NOT FIND ANY JUSTIFICATION FOR TH E ADDITION SO MADE BY THE ASSESSING OFFICER. HENCE, I DIRECT THE ASSESSIN G OFFICER TO DELETE THE SAME. 4. DURING THE COURSE OF ASSESSMENT, THE ASSESSING O FFICER HAS ALSO DISALLOWED 50% OF THE EXPENSES DEBITED TO P&L ACCOUN T WHICH PERTAINS TO SALARY, CONVEYANCE, TERMINAL CHARGES, ACCOUNTING CHARGES AND OFFICE EXPENSES. BY THE IMPUGNED ORDER, THE LD. CIT(A) REST RICTED THE DISALLOWANCE TO THE EXTENT OF 25%. I FOUND THAT DURI NG THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WAS FOUND THAT MO ST OF THE EXPENSES WERE SUPPORTED BY SELF MADE VOUCHERS. KEEPING IN VIE W THE ALLEGATION OF THE ASSESSING OFFICER AND THE LD. CIT(A), I MODIFY THE DISALLOWANCE AND DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALL OWANCE OF EXPENSES TO THE EXTENT OF 10%. I DIRECT ACCORDINGLY. ITA 1463/JP/2018 NEERA MATHUR VS. ITO 4 5. IN SO FAR AS REOPENING OF THE ASSESSMENT IS CONC ERNED, I FOUND THAT THERE WAS SUFFICIENT REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, ACCORDINGLY, REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER WAS JUSTIFIED AND I UPHOLD THE SAME. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH, 2019 SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 TH MARCH, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANTS- SMT. NEERA MATHUR, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 2(1), AJMER. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1463/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR