Rajendra Goyal, New Delhi V. ITO ward-41(2), New Delhi

ITA 1941/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9644 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Speculation loss
• Section: 148; 144; 142(1); 234B; 150(1); 143(2)

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1941/Del/2019 [Assessment Year : 2013-14] Rajendra Goyal, 24, Lord Buddha Apartment, New Delhi. PAN-ALBPG2330B vs ITO, Ward-41(2), New Delhi. APPELLANT RESPONDENT Appellant by None Respondent by Shri Mrinal Kumar Das, Sr.DR Date of Hearing 19.09.2022 Date of Pronouncement 29.09.2022 ORDER PER KUL BHARAT, JM : The present appeal filed by the assessee for the assessment year 2013- 14 is directed against the order of Ld. CIT(A)-14, New Delhi dated 01.01.2019. The assessee has raised following grounds of appeal:- 1. “That the order passed u/s 144 of the I.T. Act, 1961 on 31.03.2016 is perverse to the law and to the facts of the case, because of the non-receipt / service of notice claimed to be issued u/s 143(2) of the Income Tax Act, 1961 on 31.08.2015 and 17.09.2015, because of sending the same at the wrong address of the appellant i.e. 94, Lord Buddha Apartments, Inder Enclave, Delhi. The notice claimed to be affixed on 24.09.2015 was not as per the law and procedure laid down under the CPC, as appears from the copy of affixture supplied, which the CIT(A) has also failed to appreciate. 2. That the ex-parte order passed u/s 144 of the Act is further illegal because the appellant has filed the ITR at 24, Lord Buddha Apartments, Inder Enclave, Delhi on 12.03.2015, and the affixture of notice as alleged to be claimed was further illegal because without Page | 2 containing / putting any date thereupon to the service of notice to the appellant. 3. That the order passed u/s 144 of the Income Tax Act, 1961 on 31.03.2016 becomes barred by limitation under the provisions of law contained u/s 143(2) Proviso of the Income Tax Act, 1961, because of the non-receipt / service of any notices alleged as claimed to be issued on the wrong address even the affixture was also done at the wrong address, as appears from the records. 4. That the Assessing Officer and even the Ld. CIT(A) were failed to appreciate while passing the ex-parte order u/s 144 of the Act, that the procedure of the affixture of any notice have been defined under Order-V of Rule-17 of the Civil Procedure Code, which has not been followed in the said case, as such the order passed was illegal against the law and to the facts of the case. 5. That the additions made of Rs. 12,43,730/- in the declared income of the appellant is further based upon mere presumption and guesswork of the Assessing Officer, as without the support of any material either collected or placed upon records, which could justified that the appellant has earned 1% commission on the total transaction, due to which the additions were made of Rs. 12,43,720/- in the income of the appellant. 6. That the order passed by the CIT(A) was further wrong on facts and erroneous on the point of law because of not taking into consideration the remand report sent by the Assessing Officer on 21.06.2017, on the basis of additional evidence filed and placed upon records under Rule 46A of the Income Tax Rules, wherein he confirmed that the appellant has earned only the gross profit of Rs. 35,406/- from the said transaction, out of which the appellant has paid STT, interest, Service Tax etc. and as per the details filed, there was a net loss to the Rs. 31,594/- during the year. Page | 3 7. That while passing the appellate order, the Ld. CIT(A) failed to appreciate, that factually there was a net loss to the appellant of Rs. 3,21,368/- as per the jobbing transaction statement, delivery transaction statement and ledger account of the broker obtained and possessed by the appellant, which the CIT(A) failed to appreciate while passing the appellate order. 8. That the Assessing Officer and Ld. CIT(A) were both wrong on facts and erroneous on the point of law because of taking gross value of the purchases and sales of the speculative transactions, though it could required to be taken on its net value of profit and loss as per the Law / Rules framed under the Income Tax Act 1961. 9. That the Ld. CIT(A) has further erred in law for issuing directions u/s 150(1) of the Income Tax Act 1961 to the Assessing Officer for the issuance of notice u/s 148 for the A.Y. 2012-13 without the support of proper material either collected or ever placed upon records. 10. That on the facts and circumstances of the case, the order passed by the Assessing Officer and upheld by the Ld. CIT(A) was further not tenable as the appellant has already suffered losses of Rs. 3,21,367/- on the speculative and trading of share transactions, for which he has already filed and placed upon records all the documents under Rule-46 A before the Ld. CIT(A). 11. That the order passed is further unconstitutional as against the law and to the facts of the case because of not providing reasonable and proper opportunity by the Assessing Officer and by the Ld. CIT(A) prior to pass the orders. 12. That the order passed by the Ld. CIT(A) on 01.01.2019 was further not correct under the law and to the facts of the case, because of estimating the total income at Rs. 14,42,215/- without taking into consideration the information provided, documents produced, filed and placed upon records by the appellant under Rule-46A of the Page | 4 Income Tax Rules and without looking to the remand report sent by the Assessing Officer on 21.06.2017. 13. That charging of interest u/s 234B and initiating penalty proceedings u/s 271(l)(c) of the Act, are also bad in law because of based upon the illegal and impugned additions made in the declared income only on the basis of mere presumption, surmises and guesswork of the Assessing Officer. 14. That the appellant assessee assails his right to amend, alter or change any grounds of appeal at any time even during the course of hearing of this instant appeal.” 2. At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that no one has been attending the proceedings on behalf of the assessee since 28.06.2021. Even before Ld.CIT(A), there was no representation on behalf of the assessee. The assessment order passed by the Assessing Officer (“AO”) is also u/s 144 of the Act. The AO has recorded that various opportunities were granted to the assessee but there was no representation on behalf of the assessee. Under these facts, the appeal of the assessee is taken up for hearing in the absence of the assessee and being disposed off on the basis of material available on record. 3. The only effective ground in this appeal is against the making of addition of Rs. 12,43,730/-. BRIEF FACTS OF THE CASE 4. Brief facts of the case are that the return of income was filed by the assessee on 12.03.2015 by declaring total income of Rs.1,98,250/-. The case was selected for scrutiny assessment under CASS. Statutory notices u/s 143(2) of the Income Tax Act, 1961 (“the Act”) was issued on 31.08.2015 and Page | 5 17.09.2015. Subsequently, notices u/s 142(1) of the Act alongwith detailed questionnaire were issued to the assessee on various dates. In response to these notices, no one attended the proceedings nor any reply was filed on behalf of the assessee. Thereafter, the assessment was passed ex-parte on the basis of documents gathered during the proceedings and the AO made addition of Rs.12,43,730/- as the speculative gain on sale and purchase of shares vide order dated 31.03.2018. 5. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal. 6. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal. 7. Ld. Sr. DR appearing on behalf of the Revenue, vehemently argued that the assessee has been thoroughly negligent and has failed to prove the genuineness of the transaction. Therefore, the authorities below were justified in making the addition regarding speculative gain of Rs.12,43,730/-. 8. I have heard Ld. Sr. DR and perused the material available on record and gone through the orders of the authorities below. I find that Ld.CIT(A) has given a finding on fact by observing as under:- 14.1. “It is in this background that the assessee claimed that it incurred a loss of Rs. 31,594/-in assessment year 13-14. These figures are different from the submission of the assessee, reproduced in Para 12 (supra) at Rs. 97861.32. The above figures again do riot reflect the correct profit/loss as for the scripts which were existing in the Page | 6 opening stock (supra) and sold during the year the buy value has been shown as nil and the sale value has been taken as the profit. 15. From a perusal of above it is apparent that the assessee has not worked out its profit correctly, and in spite of the huge turnover in shares proper books-of accounts have not been maintained and the audit has also not been done. There is no basis for the returned income shown as well. 15.1. In computation of profit from shares furnished by the assessee the working is as under: Total sates as opening in the statements 130389064 Total purchases as opening in the statements 130354257 Gross profit 34807 Details of Expenses Service tax 9086.00 Transaction tax 17004.00 STT 40910.00 Total Expenses 67000.00 Expenses 67020.00 Gross profit 34807.00 (difference of sales/purchases) Less 32193.00 Service error 600.00 Net Speculative loss 31593.00 15.2. Therefore, assessee is trying to reconcile figures without complete working. 16. Considering the fact that the total transactions, i.e. the total of three transaction codes comes to Rs. 13,03,89,064.78, which includes speculative transactions of Rs. 12,43,73,054/-, the AO has taken one percent of the same as net profit. Moreover, the difference of sale and purchase in transaction code 1 and 2 is Rs. 31,823/- and the returned income of the assessee is Rs. 1,98,520 and gross total of income is Rs. 2,98,520/-. But no details of returned income are available. Therefore the Assessing Officer's action of an estimated assessment of total income at Rs. 14,42,215/- is upheld. Enhancement of addition from Rs.12,43,730/- Page | 7 to Rs.13,23,490/- is not being done as estimate as above covers all discrepancies.” 9. The assessee has not placed any contrary material to rebut the findings of Ld.CIT(A). Therefore, in the absence of any contrary evidences, I do not see any reason to disturb the findings of Ld.CIT(A), the same is hereby affirmed. Thus, grounds raised by the assessee are dismissed. 10. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 29 th September, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI