Aashna Broking Services Pvt.Ltd., Ahmedabad V. The Dy.CIT.,Circle-3, Ahmedabad

ITA 3222/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60489 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-06-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 06-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M G PATEL
• Keywords: Business income; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.A. NO.3222/AHD/2010 A. Y. 2007-08 M/S AASHNA BROKING SERVICES PVT. LTD. A/13 SHARDUL APARTMENT NR. SHYAMAL RAW HOUSE, 132FT RING ROAD, SATELLITE AHMEDABAD-380 051 PAN-AAFCA2513C APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-3, AHMEDABAD RESPONDENT DEPARTMENT BY : MS. SURABHI SHARMA SR. D.R. ASSESSEE BY : SHRI M.G. PATEL, A.R. DATE OF HEARING : 04.06.2012 DATE OF PRONOUNCEMENT 04.06.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XVI, AHMEDABAD DATED 08.11.2010 PASSED IN APPEAL NO.CIT(A)-XVI/DCI T.CIR-3/425/09-10. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSE E READS AS UNDER:- THE LD. CIT(A)-XVI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE ADDITION OF RS.53,53,826 /- AS SUPPRESSED AND UNDISCLOSED INCOME FROM SHARE TRADING BUSINESS. I.T.A. NO.3222/AHD/2010 A. Y. 2007-08 2 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THE ASS ESSMENT ORDER THE A.O. PREPARED A LIST OF PROFIT AND LOSS ACCOUNTS ON PAGE -3 IN PARA 3.2. AS PER THE DETAILS OF SHARE PURCHASED AND SALE TRANSACTION MADE THROUGH A SE CAPITAL MARKET LTD. FROM THE BOOKS OF ASE MARKET LTD. AS PER THIS PROFIT AND LO SS ACCOUNTS THE ASSESSEE HAS UNDERVALUED HIS NET PROFIT OF RS.61,80,326/- AS AGA INST RS.8,26,500/- SHOWN BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNTS ON THE BAS IS OF HIS INCOME TAX RETURN HAS BEEN FILED. THE A.O. HAS MENTIONED THAT THE ASSESS EE WAS ASKED TO EXPLAIN THE DIFFERENCE VIDE LETTER DATED 30.11.2009 AND ORDER S HEET NOTING DATED 08.12.2009, 16.12.2009 AND 24.12.2009. ON 24.12.2009 THE AUTHOR IZED REPRESENTATIVE ATTENDED AND GAVE A SUBMISSION THAT THE CORRECT GROSS PROFIT FROM THE DEALING ASE MARKET LTD. WAS RS.93,18,659/-. HOWEVER, DUE TO ERROR IN ENTRY OF THIS SALE OF RS.50,02,874/- OF ASE MARKET LTD., WHICH IS WRONGLY ENTERED INTO THE SALES ACCOUNT OF CD INTEGRATED, THE DIFFERENCE IN THE GP AND ULTIMATE NET PROFIT HA S ARISEN. THE A.O. FURTHER STATED THAT HE HAS VERIFIED THE CLAIM OF THE ASSESSEE WITH A COPY OF LEDGER ACCOUNT OF CD INTEGRATED SERVICES LTD. FROM THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THERE IS NO SUCH ENTRY OF RS.50,02,874/- OF SALES IN THE SAID L EDGER ACCOUNT AND CD INTEGRATED. ALL THE ENTRIES HAVE BEEN VERIFIED IN RESPECT OF SA LES FROM 01.04.2006 TO 31.03.2007 IN THIS ACCOUNT. THEREFORE, THE ASSESSEES CLAIM WA S DEVOID OF ANY MERIT. THE A.O. FURTHER STATED THAT DEPRECIATION OF THE TRANSACTION IN NSC AND BSC ARE CARRIED OUT ONLINE WITH THE CLIENT UNIQUE ID AND OTHER SECURITY MEASURES. EVEN IF THE ASSESSEE COMMITS ANY MISTAKE OR ERROR, VERY NEXT MOMENT THE DISCREPANCY ARISES WITH THE ONLINE ACCOUNT OF ASSESSEE WITH THE BROKER AS A RES IDENT NSE AND BSE. IN VIEW OF THE ABOVE, THE A.O. ADDED THE AMOUNT OF RS.53,53,826/- AS SUPPRESSED PROFIT BEING UNACCOUNTED AND UNDISCLOSED INCOME FROM THE BUSINES S OF SHARE TRADING. I.T.A. NO.3222/AHD/2010 A. Y. 2007-08 3 4. LD. CIT(A) HAS CONFIRMED THIS ACTION OF THE A.O . FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSES SEE PLACED RELIANCE ON THE FOLLOWING WRITTEN SUBMISSIONS:- THE LD. A.O., DURING THE ASSESSMENT PROCEEDINGS AS KED FOR BREAK UP OF TOTAL SALES MADE DURING THE YEAR BETWEEN AHME DABAD STOCK EXCHANGE AND CD INTEGRATED. THE APPELLANT SUBMITTE D, VIDE LETTER DATED 12.12.2009 (PAPER BOOK PG. NOS.30 TO 34), PARTY WIS E BREAK-UP OF SALES- PURCHASE AND GROSS PROFIT FOR THE YEAR 31.03.2007. IN COMPUTING THE SAID DETAILS, BY OVERSIGHT, SALES AMOUNTING TO RS.50,02, 874/- WAS INCLUDED IN CD INTEGRATED INSTEAD OF AHMEDABAD STOCK EXCHANGE. THE ASSESSING OFFICER CALLED FOR DETAILS OF APPELLANTS ACCOUNTS FROM AHMEDABAD STOCK EXCHANGE WHEREIN THE AMOUNT OF RS.50,02,874/- WAS I NCLUDED IN THE ACCOUNT OF THE APPELLANT. THE APPELLANT FOUND THIS MISTAKE AND LATER ON, VIDE LETTER DATED 24.12.2009 (PAPER BOOK PGS.35 TO 40) AND SUBMITTED THE CORRECT BREAKUP FROM BOTH THE COMPANIES OF PURC HASE AND SALES. THE ASSESSING OFFICER TOOK THE CORRECT SALES FIGURE INCLUDING RS.50,02,874/- IN THE ACCOUNT OF AHMEDABAD STOCK EX CHANGE BUT DID NOT REDUCE THE CORRESPONDING AMOUNT IN THE ACCOUNT OF C D INTEGRATED AND MOVED FORWARD TO MAKE ADDITION OF RS.53,53,826/- VI DE ASSESSMENT ORDER DATED 29.12.2009. IT IS TO BE NOTED HERE THAT TOTAL OF SALES, PUPRCHA SE AND PROFIT/LOSS SHOWN IN SCHEDULE-1 OF LETTER DATED 12.12.2009 (PAP ER BOOK PG.31) IS EXACTLY THE SAME FIGURE AS SHOWN BY THE APPELLANT I N THE AUDITED ACCOUNTS-PROFIT & LOSS ACCOUNT AT PAPER BOOK PG.8. THIS SHOWS THAT MISTAKE OF INCLUDING RS.50,02,874/- SALES IN THE AC COUNT OF CD INTEGRATED INSTEAD OF AHMEDABAD STOCK EXCHANGE WAS A GENUINE M ISTAKE IN COMPUTING THE BREAK UP OF SALES AND IT WAS NOT AFFE CTING OVERALL PROFIT/LOSS OF THE APPELLANT COMPANY. THE ABOVE CLARIFICATION WAS DULY MADE BEFORE THE LD . CIT(A) IN THE WRITTEN SUBMISSIONS MADE BEFORE HIM. THE SAME IS R EPRODUCED AT PAPER BOOK PGS.221 TO 223. BUT HE HAS FAILED TO CONSIDER THE SAME. 6. LD. D.R., ON THE OTHER HAND, CONTENDED THAT THE WRITTEN SUBMISSIONS, RELIED UPON BY THE ASSESSEE REQUIRE VERIFICATION AT THE END OF THE A.O., THEREFORE, THE MATTER MAY KINDLY BE RESTORED TO THE FILE OF THE A. O. FOR SUCH VERIFICATION. I.T.A. NO.3222/AHD/2010 A. Y. 2007-08 4 7. AGREEING WITH THE SUBMISSIONS OF LD. D.R., THE MATER IS RESTORED BACK TO THE FILE OF THE A.O. FOR VERIFYING THE CONTENTION O F THE ASSESSEE, PUT UP BY HIM IN HIS WRITTEN SUBMISSIONS, REPRODUCED ABOVE, AND THEREAFT ER DECIDING THE MATTER AFRESH IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 04.06.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# *