ITO-WD-1(2)(1), AHMEDABAD, AHMEDABAD V. DARSHIT VIJAYSINHBHAI SHETH, AHMEDABAD

ITA 2095/AHD/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted the additions made by the Assessing Officer regarding unexplained business income and unexplained expenditure for the Assessment Year 2012-13. The Assessing Officer had initially made these additions following a reopening of the assessee's case under Section 147 of the Income-tax Act, based on allegations of non-disclosure of details related to share trading transactions in Scan Steels Ltd. The CIT(A) found that the Assessing Officer had not properly analyzed these transactions and that the assessee had provided sufficient evidence to explain the transactions and the sources of the expenditures. The Tribunal, after reviewing the materials and arguments presented, concurred with the CIT(A)'s decision and dismissed the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25837 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K PATEL
• Assessee Lawyers: MAMTA SINGH
• Keywords: Business income; Unexplained cash credit; Unexplained expenditure; Sham transactions; Speculative transactions; Bogus
• Section: 147; 143(3); 250; 68; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT I.TA. No.2095/Ahd/2024 (Assessment Year: 2012-13) The Income Tax Officer, Ward-1(2)(1), Ahmedabad. Vs. Darshit Vijaysinhbhai Sheth, 53, Akshay, Shrimali Society, Navrangpura, Ahmedabad-380009. [PAN No.ACEPS6665D] (Appellant) .. (Respondent) Appellant by : Shri M K Patel, AR Respondent by: Smt. Mamta Singh, Sr. DR Date of Hearing 26.02.2025 Date of Pronouncement 10.03.2025 O R D E R PER: DR. BRR KUMAR, VICE PRESIDENT: The captioned appeal has been filed by the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short) dated 06.11.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2012-13. 2. The Revenue has taken the following grounds of appeal:- 1. `Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the addition ITA No.2095/Ahd/2024 Asst.Year –2012-13 - 2– of Rs.13,56,587/- on account of unexplained business income u/s.68 of the Act and addition of Rs.3,34,967/- on account of unexplained expenditure u/s.69 of the Act, without appreciating the facts of the case.? 2. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in ignoring the facts that the assessee has transacted in the scrip of scan Steels Ltd. which have been used by different share brokers for providing bogus LTCG by creating artificial market and price manipulation, and assessee was one of the beneficiaries. 3. In this case, the assessee, who is an individual, filed his return of income for the year under consideration on 27.09.2012 declaring total income at Rs.3,65,850/- and the assessment u/s 143(3) of the Act was passed on 28.12.2013. Subsequently, the assessee’s case was reopened u/s 147 of the Act by the Assessing Officer on the ground that the assessee had failed to furnish full and true details of his share trading transactions made in Scan Steels Ltd during the assessment proceedings due to which income to the extent of Rs.13,56,587/- has escaped assessment. The Assessing Officer thereafter completed assessment u/s 143(3) r.w.s. 147 of the Act on 28.11.2019, making addition of Rs.13,56,587/- on account of unexplained cash credit u/s 68 of the Act and Rs.3,34,967/- on account of unexplained expenditure u/s 69 of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who deleted both the additions made by the Assessing Officer. ITA No.2095/Ahd/2024 Asst.Year –2012-13 - 3– 5. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 6. We have heard the rival contentions and perused the material available on record. With regard to the addition of Rs.13,56,587/- made by the Assessing Officer, the Ld. CIT(A) held that the Assessing Officer had not analysed the transaction in Scan Steel Limited and had not even given the details of gain/loss from these transactions in the assessment order. The Ld. CIT(A) also held that the assessee had explained the transaction in Scan Steel Limited as tabulated below:- Sr. No. Nos. Purchase/Loss Sale/Profit Profit/ Loss Mode Date Amount Date Amount (1) 2000 22/06/2011 273279 23/06/2022 277645 4366 Delivery (2) 200 24/06/2011 31347 27/06/2011 31952 605 Delivery (3) 21/06/2011 34232 22/06/2022 1725 (32507) Speculation The Ld. CIT(A) clearly and factually held that the assessee had purchased shares of Scan Steel Limited on 22.06.2011 and sold on 23.06.2011, and further shares were purchased on 24.06.2011 and sold on 27.06.2011. The Ld. CIT(A) also observed, pointing out from the above, that the assessee had indeed done trading in shares and such transactions could not be treated as sham transactions. Ld. CIT(A) also held that the assessee declared the sale and purchase transactions as his turnover. The Assessing Officer had considered the sale and purchase of these so-called speculative transactions as ITA No.2095/Ahd/2024 Asst.Year –2012-13 - 4– turnover instead of net profit or loss and made the addition solely relying on the investigation report and did not carry out any independent investigation on the matter so as to substantiate his findings. We, therefore, do not find any infirmity in the order of the Ld. CIT(A) on this issue and this ground of Revenue is thus dismissed. 7. With regard to the addition made by the Assessing Officer u/s 69 of the Act on account of credit card expenditure of Rs.3,34,967/-, the assessee had submitted ledger account of credit card statement before the Ld. CIT(A) as Exhibit 12, which has been made a part of the order of the Ld. CIT(A) at page No. 5, based on which, Ld. CIT(A) deleted the said addition holding that the assessee had explained the source of payment of credit card expenses. We, therefore, see no infirmity in the order of the Ld. CIT(A) which is upheld. 8. In the result, the appeal of the Revenue is dismissed. This Order pronounced in Open Court on 10.03.2025 Sd/- (DR. BRR KUMAR) VICE PRESIDENT Ahmedabad; Dated 10.03.2025 **btk TRUE COPY ITA No.2095/Ahd/2024 Asst.Year –2012-13 - 5– आदेश क\u0007 \b\tत\u000bल\rप अ\u0010े\rषत/Copy of the Order forwarded to : 1. अपीलाथ\b / The Appellant 2. \u000bयथ\b / The Respondent. 3. संबं\u0010धत आयकर आयु\u0017त / Concerned CIT 4. आयकर आयु\u0017त(अपील) / The CIT(A)- 5. \u001aवभागीय \u001eत\u001eन\u0010ध, आयकर अपील!य अ\u0010धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील\u001eय अ\u001fधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation …06.03.2025……………….. 2. Date on which the typed draft is placed before the Dictating Member .07.03.2025… 3. Other Member… . 07.03.2025…………… 4. Date on which the approved draft comes to the Sr.P.S./P.S ……07.03.2025……… 5. Date on which the fair order is placed before the Dictating Member for pronouncement 10.03.2025………… 6. Date on which the fair order comes back to the Sr.P.S./P.S ……10.03.2025……… 7. Date on which the file goes to the Bench Clerk …10.03.2025………… 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order……………………………………` "