MONARCH NETWORTH CAPITAL LIMITED,MUMBAI V. DEPUTY COMMISSIONER OF INCOME -TAX, CENTRAL CIRCLE-1(1), AHMEDABAD, AHMEDABAD

CO 16/AHD/2024

AI Insights

The case involves Monarch Networth Capital Ltd., a company engaged in stock broking and financial services, which faced reassessment proceedings for the assessment years 2013-14, 2014-15, and 2015-16. The reassessment was initiated by the Assessing Officer based on allegations of fictitious losses and gains from transactions in a penny stock, Looks Health Services Ltd., which was identified as a vehicle for manipulation. The Assessing Officer made additions under section 69A of the Income Tax Act, treating the transactions as non-genuine. The assessee contested these additions, and the CIT(A) ultimately deleted them, leading to the Revenue's appeal to the Tribunal. The Tribunal upheld the CIT(A)'s decision, finding no merit in the Revenue's arguments and supporting the assessee's position that the transactions were genuine and properly recorded.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312590 (ITAT-AHMEDABAD)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Other Referred Cases: Varun Nagindas Patel v. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ATUL PANDEY
• Assessee Lawyers: REVENUE; REVENUE; REVENUE; SHRTI BANDISH SOPARKAR; PARIN SHAH
• Keywords: Speculation loss; Business income; Reassessment proceedings; Unexplained investment; Reopening of assessment; Principle of natural justice; Accommodation entries; Earning of tax free income; Bogus
• Section: 147; 148; 143(3)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “डी“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD \u0015ी टी.आर. से\u0019\u001aल क ुमार, \u0011ाियक सद एवं \u0015ी मकरंद वसंत महादेवकर, लेखा सद क े सम\"। ] ] BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER Sl. No( s) आयकर अपील सं/ ITA/COs No(s) िनधा \u0010रण वष\u0010/ Assess- ment Year(s) Appeal(s) / Cos by (Assessee): अपीला थ\u0015 / \u0016\u0017थ\u0015 / Appellants/ बना म/vs. Respondents 1. ITA 960/Ahd/2024 2013-14 Manish Ranjan Dy.CIT Central Circle-1(1) Ahmedabad – 380 009 (Revenue) Monarch Networth Capital Ltd. 901/902, Atlanta Centre Sonawala Lane Opp. Udhyog Bha Goregaon East Mumbai – 400 063 (Assessee ) PAN: AAACN 1184 F 2. ITA 961/Ahd/2024 2014-15 -do- -do- 3. ITA 962/Ahd/2024 -do- -do- 4. CO 14/Ahd/2024 (in ITA 960/Ahd/2024) 2015-16 By Assessee By Revenue 5. CO 15/Ahd/2024 (in ITA 961/Ahd/2024) 2013-14 By Assessee By Revenue 6. CO 16/Ahd/2024 (in ITA 962/Ahd/2024) 2014-15 By Assessee By Revenue Assessee by : Shrti Bandish Soparkar, AR & Shri Parin Shah, AR Revenue by : Shri Atul Pandey, Sr.DR सुनवा ई की ता रीख/Date of Hearing : 24/04/2025 घोषणा की ता रीख /Date of Pronouncement: 29 /04/2025 ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 2 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: These appeals arise out of the consolidated order passed by the Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as “CIT(A)”] dated 27.02.2024, for the Assessment Years (AYs) 2013–14, 2014–15 and 2015–16, whereby the CIT(A) disposed of the reassessment proceedings under section 147 r.w.s. 144B of the Income Tax Act, 1961 [hereinafter referred to as “the Act”]. The revenue is in appeals against the deletion of additions under section 69A of the Act made by the National Faceless Assessment Centre, [hereinafter referred to as “Assessing Officer”], and the assessee has filed cross-objections challenging the validity of re-assessment. Since the issues involved in all three assessment years are identical and arise from a common set of facts and circumstances, the appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. Facts of the Case: 2. The assessee is engaged in the business of stock broking, portfolio management, investment banking, and other financial services. For the relevant assessment years 2013–14, 2014–15 and 2015–16, the assessee had filed its original returns of income declaring NIL taxable income after setting off brought forward business losses. The assessments for A.Ys. 2013–14 and 2014–15 were completed under section 143(3) of the Act. However, for A.Y. 2015–16, the return was processed under section 143(1) of the Act and the case was not subjected to scrutiny assessment in the original round. ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 3 2.1. Subsequently, based on information received from the Directorate of Investigation, Ahmedabad, and further corroborated by inputs from the Insight portal, the Assessing Officer initiated reassessment proceedings under section 147 of the Act in all three assessment years. The core allegation was that the assessee had claimed fictitious losses and gains from transactions in the scrip Looks Health Services Ltd. (LHSL), which was listed as a penny stock and identified by the Investigation Wing as a vehicle for accommodation entries and manipulation. It was alleged (as specifically mentioned in assessment order for A.Y. 2015-16) that the assessee, in collusion with operators including Jignesh Shah and Naresh Manakchand Jain, had entered into pre-arranged trades designed to generate artificial losses (or sometimes gains) without real economic activity, with the intent to evade taxes. 2.2. Accordingly, notices under section 148 of the Act were issued on 31.03.2021 for all three years. In response to the said notices, the assessee filed its returns on different dates in April and May 2021, reiterating NIL income and offering detailed explanations regarding the nature of the transactions. The assessee also filed objections to the reopening, contending inter alia that the reasons for reopening were not validly recorded, and the entire proceedings were based on incorrect assumptions and third-party information without independent verification. 3. During the reassessment proceedings, the Assessing Officer noted that the assessee had allegedly availed of accommodation entries leading to – - fictitious loss of Rs.22,26,798/- and short selling gain/loss of Rs.1,45,15,798/- in A.Y. 2013–14, - fictitious derivative loss of Rs.1,40,65,890/- in A.Y. 2014–15, and ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 4 - a mix of fictitious loss of Rs. 49,84,585/- and fictitious gain of Rs.13,34,300/- in A.Y. 2015–16, along with an alleged unsecured loan entry of Rs. 10,48,363/-. 3.1. These were all stated to have been routed through known entry operators and manipulated brokers. 3.2. The AO proceeded to frame the reassessment orders dated 30.03.2022 under section 147 read with section 144B of the Act in all three assessment years. The AO treated the losses as non-genuine and made additions under section 69A, characterizing the same as unexplained investments or money. It was further held by the AO that the transactions in LHSL and other scrips were manipulated and fictitious, relying heavily on the report of the Investigation Wing and various statements recorded during search proceedings in third-party cases. 4. Not satisfied with the reassessment orders, the assessee preferred appeals before the CIT(A). Before the CIT(A), the assessee raised jurisdictional grounds challenging the reopening, as well as substantive grounds against the additions made under section 69A of the Act. It was specifically contended by the assessee that: • The reopening of assessment was invalid as the reasons for reopening were either recorded after the issuance of notice or not communicated properly. • The satisfaction of the AO was based on incorrect assumptions — particularly, the AO stated that the assessee had claimed LTCG/STCG, whereas in reality, the gains/losses were declared under the head “Income from business or profession” in the regular course of business. • The assessee, being a SEBI-registered Market Maker, had undertaken genuine trading in shares of LHSL and was entitled to act as a liquidity ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 5 provider under the Exchange guidelines. The entire business model and trades were duly recorded in audited financials. • The AO had failed to distinguish between speculative loss and business loss; moreover, the AO made additions without issuing any specific show cause notice regarding the set-off of brought forward losses. • Crucially, the AO did not quantify how the so-called fictitious loss or profit was calculated, and no material evidence was placed on record to establish the alleged accommodation entries. • The approval of the Principal Commissioner of Income Tax (PCIT), required under section 151 prior to reopening, was not furnished to the assessee, despite specific written request, which, according to the assessee, violated principles of natural justice and statutory safeguards. 5. The CIT(A), in a common appellate order dated 27.02.2024, proceeded to adjudicate all three appeals together. On the issue of validity of reassessment, the CIT(A) upheld the reopening by dismissing grounds no. 1 to 4 raised by the assessee in each year. The CIT(A) held that the AO had duly recorded reasons and obtained the requisite sanction under section 151. Though the communication of reasons was delayed, it was not fatal to the jurisdiction. 5.1. However, on merits, the CIT(A) found substantial force in the submissions of the assessee. After detailed examination, the CIT(A) held that the AO had merely relied on general statements and third-party investigations without establishing a direct nexus between the assessee’s transactions and the accommodation entries. The CIT(A) observed that: • The AO failed to carry out any independent investigation or verification to corroborate the claim that the assessee’s transactions were non-genuine. ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 6 • The assessee had shown actual business income from trading in LHSL and had incurred losses/gains in the ordinary course of its business as a market intermediary. • No falsification of records or evidence of cash trails or financial benefit accruing to the assessee was demonstrated by the AO. • The disallowance of brought forward loss was made without adequate opportunity or justification and required verification. 5.2. Accordingly, the CIT(A) deleted the additions made under section 69A of the Act in all three years and restored the issue of brought forward loss for verification to the AO. Thus, the appeals were partly allowed, with substantial relief on merits but without accepting the assessee’s jurisdictional challenge. 6. Aggrieved by the common order of CIT(A), the revenue is in appeal before us and the assessee has filed cross-objections. Following are the respective grounds: ITA No. 960/Ahd/2024 a) In the facts and on the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.1,45,15,798/- u/s. 69A of the Act on account of short selling of shares, without appreciating the facts that the share price of scrip, namely Looks Health Services Ltd. was manipulated and assessee generated fictitious loss in this scrip. b) In the facts and on the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.22,26,798/- u/s. 69A of the Act on account of disallowance of fictitious loss, without appreciating the facts that the share price of scrip, namely Looks Health Services Ltd. was manipulated and assessee generated fictitious loss in this scrip. ITA No. 961/Ahd/2024 1. In the facts and on the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.1,40,65,890/- u/s. 69A of the Act on account of disallowance of fictitious loss, without appreciating the facts that the share price of scrip, ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 7 namely Looks Health Services Ltd. was manipulated and assessee generated fictitious loss in this scrip. ITA No. 962/Ahd/2024 1. In the facts and on the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.49,84,585/- being fictitious loss and Rs.13,34,300/- being fictitious gain on trading in the scrip Looks Health Services Ltd., without appreciating the facts that the share price of scrip was manipulated and assessee generated fictitious loss/gain in this scrip. Common Grounds in CO Nos.14,15 and 16/Ahd/2024 1. In law and facts and circumstances of the case, the Ld. CIT(A) has erred in not quashing the re-assessment notice issued u/s 148 of the Act by the AO, as in the present case notice u/s 148 was issued on 31/03/2021 whereas copy of reasons for re- opening was issued vide annexure to notice issued u/s 143(2) of the Act dated on 29th July 2021which clearly suggest that reasons recorded for alleged escapement of income is subsequent to issue of notice u/s 148 of the Act. 2. In law and facts and circumstances of the case, the Ld. CIT(A) has erred in not quashing the reassessment notice issued u/s 148 of the Act by the AO as AO had recorded incorrect reasons in as much as he stated that appellant had received bogus LTCG and STCG/exempt income whereas the appellant has offered gain/loss arising from share transactions as \"Income from business or profession\". The Ld CIT(A) ought to have appreciated that Assessing Officer has not applied his mind before recording reasons for re-opening the case u/s 148 of the Act and his satisfaction is based upon incorrect facts. 3. The Ld. CIT(A) has erred in not considering/ quashing the reassessment proceedings and consequent reassessment order as the copy of PCIT prior approval was not provided to the appellant even though specific written request was made. 4. In law and in the facts and circumstances of the appellant's case, appellant craves leave to add, amend and/or alter the ground or grounds of appeal either before or at the time of hearing of the appeal 7. During the course of hearing before us, the learned Authorized Representative (AR) of the assessee submitted that the assessee has raised a cross-objection primarily challenging the validity of the reassessment proceedings initiated under section 147 of the Act. The AR contended that the Assessing Officer had reopened the assessments in all three years based on a fundamentally incorrect presumption that the assessee was one of the ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 8 beneficiaries of short selling transactions in the scrip Looks Health Services Ltd. The AR pointed out that such a conclusion was factually erroneous and not supported by the actual entries in the assessee’s books of account or return of income. However, the AR fairly submitted that since the CIT(A) had already adjudicated the issue on merits in favour of the assessee and had deleted the additions made under section 69A of the Act, the assessee does not wish to press the jurisdictional grounds raised in the cross-objection at this stage. He clarified that this position was being adopted purely for the sake of judicial economy and without prejudice to the legal validity of the objections raised. The AR further submitted that in the event the Hon’ble Bench proposes to take a contrary view and uphold the additions made by the Assessing Officer, the assessee reserves its right to advance arguments on the grounds raised in the cross-objection relating to the invalidity of the reassessment. 7.1. On the merits of the case, the AR relied on the order of CIT(A), particularly the discussion in paragraphs 5 onwards of the common appellate order. The AR drew attention to the CIT(A)'s categorical finding that the assessee is a regular stockbroker engaged in the business of trading in securities and has consistently offered income from such trading under the head “Income from business or profession”. 7.2. The AR submitted that the CIT(A), after a detailed examination of the records, had rightly noted that the assessee had acquired a majority of the shares of Looks Health Services Ltd. through IPO in its capacity as a market maker. The CIT(A) acknowledged that there was no allegation by the Assessing Officer that such shares were fraudulently allotted. The AR highlighted that the trading in the relevant scrip was executed by the assessee ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 9 in the normal course of business and involved multiple transactions where shares were bought and sold within short timeframes, which is typical for market-making activity. The CIT(A) had taken note of the specific examples cited by the assessee, such as the sale of 3,000 shares within five days of IPO allotment, the acquisition and sale of 1,14,000 shares within the same quarter, and the buy-sell transaction of 1,08,000 shares within two days. The AR further submitted that the CIT(A) had correctly accepted the assessee’s trading and speculative accounts which showed that the assessee had - - Acquired 4,55,000 shares at an aggregate cost of Rs.1,95,71,530, sold the same for Rs.2,12,93,174 and earned a gross trading profit of Rs.17,21,644 and net trading profit of Rs.16,89,344 after expenses, - Incurred a speculative (intraday) loss of Rs.64,012, leading to net profit of Rs.16,25,331 from transactions in the said scrip. 7.3. In view of this, the AR argued that the allegation of short selling by the Assessing Officer was misplaced, as the shares were never sold without holding. The AR further stated that the CIT(A) relied on the decision the Hon’ble ITAT Ahmedabad in the case of Varun Nagindas Patel v. ITO in ITA No. 417/Ahd/2019 dated 08.12.2023, wherein the Co-ordinate Bench had accepted losses claimed in respect of trades in Looks Health Services Ltd. as genuine. The AR reproduced the relevant portion from the CIT(A)’s order: Thus, the AR submitted that the CIT(A) had rightly appreciated the factual matrix, applied the correct legal position, and deleted the additions made by the AO under section 69A. 8. The learned Departmental Representative (DR) relied upon the findings and reasoning of the Assessing Officer as set out in the reassessment orders. The DR further contended that the assessee's argument regarding ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 10 receipt of shares through IPO allotment in the capacity of a Market Maker is a new claim which was not considered by the AO during the assessment proceedings. According to the DR, this aspect requires factual verification, and if necessary, may be remanded to the AO for examination in accordance with law. In response, the AR strongly refuted the contention that the fact relating to IPO allotment and Market Maker status was being raised for the first time. He submitted that the said factual disclosure was expressly brought to the notice of the Assessing Officer during the reassessment proceedings. The AR drew attention to letter dated 14.09.2021, a copy of which is placed at Page No. 12 of the Paper Book, wherein the assessee had specifically submitted that it was allotted shares in the IPO in its capacity as a SEBI-registered Market Maker, along with supporting documents. He submitted that the Assessing Officer, despite being in possession of this information, failed to conduct any independent verification or make any adverse finding on this point. Accordingly, the AR submitted that the Revenue's allegation regarding newness of the claim is factually incorrect and devoid of merit. 9. We have heard the rival contentions, perused the material available on record, and carefully considered the findings of the Assessing Officer and the Commissioner of Income Tax (Appeals) [CIT(A)]. We now proceed to decide the appeals year-wise: Assessment Year 2013–14 (ITA No. 960/Ahd/2024): 10. The Assessing Officer made the additions alleging that the assessee had indulged in fictitious short selling transactions in the scrip Looks Health Services Ltd. However, the CIT(A) recorded a categorical finding that the assessee was allotted shares in the IPO as a Market Maker, and that there was ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 11 no short selling. The trading transactions were found to be genuine, duly supported by trading statements and recognized under the SEBI Market Maker framework. The assessee had disclosed the trading gains and speculative losses appropriately in its books and return of income. The Revenue's contention that the issue regarding Market Maker was not before the AO is factually incorrect, as the assessee had submitted the necessary details vide letter dated 14.09.2021 during the reassessment proceedings. 11. Upon careful examination, we find that the assessee had filed a detailed reconciliation statement before the CIT(A) summarizing the transactions as under: Particulars Amount (Rs.) Amount of short selling as per Show Cause Notice 1,45,15,798 Amount of fictitious loss as per Show Cause Notice -22,26,798 Net amount 1,22,89,000 Less: Cost of 2,92,800 equity shares -1,06,31,368 Profit 16,57,632 Less: Direct trading expenses (STT, Charges) -32,301 Profit on trading of LHSL offered for tax in ITR 16,25,331 This reconciliation clearly establishes that the assessee realised trading profits of Rs.16,25,331/-, which were duly declared in the books and offered for taxation under the head \"Business income\". Further, to substantiate the genuineness of the transactions, the assessee had submitted before the CIT(A) the following evidence: • Prospectus of Looks Health Services Ltd. confirming IPO participation. • Market Making Agreement with the Exchange. • Guidelines issued by SEBI and the Exchange for Market Makers. ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 12 • Transaction holding statements and demat account extracts. • Ledger accounts reflecting profits and losses separately for speculative and delivery-based transactions. • Working of profits/losses from sale of shares of LHSL. 11.1 Despite such voluminous evidence submitted, the Assessing Officer merely relied on the general report of the Investigation Wing without conducting any independent enquiry or pointing out specific irregularity in the assessee’s transactions. The CIT(A) has rightly noted all that the transactions entered into by the assessee were duly backed by documentary evidence. No adverse inference was drawn either with respect to the allotment of shares received through the IPO process or regarding the subsequent sale transactions executed by the assessee. Further, there was no material brought on record by the Assessing Officer to demonstrate the existence of any cash trail, unaccounted receipts, or financial benefit accruing to the assessee outside its duly recorded books of account. Accordingly, we find no infirmity in the order of the CIT(A) in deleting the additions made under section 69A of the Act. Both the grounds raised by the Revenue are dismissed. Assessment Year 2014–15 (ITA No. 961/Ahd/2024) 12. The addition in the present year was made by the Assessing Officer on the grounds that the assessee incurred a fictitious loss of Rs.1,40,65,890/- on account of transactions in the scrip Looks Health Services Ltd.. The Assessing Officer, while passing the reassessment order, proceeded on the assumption that the assessee had purchased 3,99,400 shares at an aggregate cost of Rs.6,34,04,930/- at an average price of Rs.158.75 per share and sold 1,10,400 shares at an average price of Rs.286.16 per share. Based on this working, the ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 13 AO computed a fictitious loss of Rs.1,40,65,890/-. However, on detailed examination of the trading account, DEMAT statements, and ledger records, the CIT(A) found that the assessee had in fact traded in only 1,10,400 shares during the year under consideration, comprising 36,800 shares on speculative basis and 73,600 shares on delivery basis. The actual trading activities yielded a speculative profit of Rs.21,027/- and a delivery-based profit of Rs.3,99,495/-, aggregating to a total net trading profit of Rs.4,20,522/-, which was duly recorded in the books of account and offered to tax under the head “Income from business or profession”. 13. The CIT(A) further observed that, even according to the Assessing Officer's own working, if the assessee were to have purchased 3,99,400 shares and sold only 1,10,400 shares, there would necessarily have been a closing stock of 2,89,000 shares. However, the AO did not account for such an inventory in the assessment, which fundamentally undermines the computation of any fictitious loss. Critically, the CIT(A) recorded that the so- called excess of 2,89,000 shares did not pertain to fresh purchases in the present assessment year but were attributable to the alleged short sale positions of the earlier assessment year, which were not properly appreciated by the Assessing Officer. The data received by the AO reflected carry-forward of earlier alleged short sales, and not fresh acquisition of shares during the relevant year. The CIT(A) noted that the assessee had provided complete trading data, ledger accounts of profits/losses on speculative and delivery- based transactions and working of gains from LHSL scrip. There was no evidence placed on record by the Assessing Officer to show that the assessee had purchased 3,99,400 shares during the year under consideration or that the recorded trading results were manipulated or fictitious. The methodology adopted by the AO for computing the alleged fictitious loss was thus found ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 14 to be factually incorrect, as the assessee had in reality earned genuine profits from the trading transactions, which were duly offered to tax. The CIT(A) elaborately discussed the matter with reference to the findings recorded for A.Y. 2013–14 and concluded that no addition could be sustained on this ground. In view of the above, we find no infirmity in the order of the CIT(A). The factual position has been correctly appreciated and the addition made under section 69A has been rightly deleted. Accordingly, the ground raised by the Revenue for this year is dismissed. Assessment Year 2015–16 (ITA No. 962/Ahd/2024) 14. The addition made by the Assessing Officer relates to an alleged fictitious loss of Rs.49,84,585/- and a fictitious gain of Rs.13,34,300/- in respect of trading in the scrip LHSL. The Assessing Officer, while framing the reassessment order, did not demonstrate how the figures of fictitious loss and gain were arrived at, nor was any specific working or computation provided in the assessment order to substantiate the allegations. 15. Upon perusal of the trading account, DEMAT statements, and other supporting documents submitted during the assessment and appellate proceedings, the CIT(A) observed that the facts of the year under consideration were similar to those discussed in A.Y. 2013–14. The CIT(A) recorded that the assessee had actually earned a speculative gain of Rs.29,937/- and a delivery-based gain of Rs.4,99,003/- from trading in the relevant scrip, which were properly accounted for and already offered to tax. The CIT(A) further noted that the Assessing Officer had not pointed out any discrepancy in the trading records submitted by the assessee. The methodology adopted by the Assessing Officer for computing the alleged fictitious loss and gain was found to be factually incorrect, particularly when ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 15 the assessee had, in fact, realized genuine profits from the trading transactions, as evident from the books of account and substantiated by primary documentary evidence. The entire issue was also elaborately discussed while disposing of the appeal for A.Y. 2013–14, where the Tribunal had upheld the genuineness of trading transactions in the scrip LHSL. In light of these facts and circumstances, we are of the considered opinion that the CIT(A) has rightly appreciated the evidentiary material and factual matrix. Since no credible evidence was brought on record by the Assessing Officer to establish that the transactions were fictitious or that they involved accommodation entries, we find no justification to interfere with the appellate order. Accordingly, the ground raised by the Revenue for A.Y. 2015–16 is dismissed. Cross-Objections filed by the Assessee (CO Nos. 14, 15 and 16/Ahd/2024) 16. The assessee has raised cross-objections primarily challenging the validity of reassessment proceedings on the grounds that reasons recorded were factually incorrect and approval under section 151 was not furnished despite request. During the course of hearing, however, the learned AR fairly stated that since the CIT(A) had decided the appeals on merits in favour of the assessee, the assessee does not press the jurisdictional grounds at this stage but reserves the right to argue them if the Bench takes a contrary view on merits. In view of the fact that the Revenue's appeals are being dismissed on merits, the cross-objections become infructuous and are accordingly dismissed as not pressed. 17. In the combined result, all three appeals filed by the Revenue for A.Ys.2013–14, 2014–15 and 2015–16 are dismissed. The Cross-Objections ITA Nos.960, 961 & 962/Ahd/2024 (By Revenue) & Cos 14, 15 & 16/Ahd/2024 (By Assessee) Asst. Years : 2013-14, 2014-15 & 2015-16 respectively 16 filed by the assessee for the corresponding assessment years are dismissed as not pressed. Order pronounced in the Open Court on 29th April, 2025 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER "