2010 (2) TMI 1240 - AT - Income Tax

Summary

Issues Involved:
The judgment involves issues related to the deletion of additions made by the Assessing Officer in the assessment of income from other sources and profit earned through trading with a specific party.

Issue 1: Deletion of Addition of Income from Other Sources
The Assessing Officer noted the declaration of long-term capital gain by the assessee based on the sale of shares of a company. The assessee provided details and evidences in response to the notice u/s 144 of the IT Act, including the purchase and sale transactions through brokers. However, the Assessing Officer considered the transaction as not genuine due to the significant increase in share value within a short period. Consequently, an addition of income from undisclosed sources was made. The ITAT, after considering the evidence presented, held that the assessee failed to establish the source of shares credited to the Demat A/c in November 2004, leading to the treatment of sale proceeds as unexplained income. The ITAT reversed the CIT(A)'s decision and upheld the assessment order, allowing Ground No.1 of the revenue's appeal.

Issue 2: Deletion of Addition of Profit from Trading
The assessee declared profit from trading with a specific party, but there was a discrepancy in the name mentioned in the return of income. The CIT(A) deleted the addition after considering the explanation provided by the assessee regarding the discrepancy and the actual income received. The ITAT upheld the CIT(A)'s decision, stating that there was no other discrepancy in the case. Therefore, Ground No.2 of the revenue's appeal was rejected.

In conclusion, the appeal of the revenue was partly allowed, with the ITAT ruling in favor of the revenue on the first issue of income from other sources and in favor of the assessee on the second issue of profit from trading.