2017 (10) TMI 316 - AT - Income Tax

Addition on account of loss in trading of shares - Assessment u/s 144 - plea of the assessee that it may be provided adequate opportunity to present its case - Held that - It is evident from the assessment order that the addition on account of loss in trading of shares was made in absence of any details. Before the Ld. CIT (A) also, the assessee could not furnish relevant details like the basis of valuation of shares, the date of purchase of shares and the working of the loss said to have been incurred on account of trading in shares. Thus, the assessee was not able to substantiate its claim before the Ld. CIT (A) also. However, before us, the Ld. AR has given an assurance that the assessee shall fully co-operate with the AO if it is given another opportunity to furnish the required details/evidences/ documents. Therefore, looking into the overall facts and circumstances of the case and keeping in mind that a high pitched assessment at ₹ 1,62,44,980/- has been made as against the returned income of ₹ 4,984/-, we deem it fit to restore the issue to the file of the AO for fresh adjudication after giving the assessee a proper opportunity. We also direct the assessee to fully co-operate with the AO in the assessment proceedings

Summary

Issues:
1. Appeal against order of Ld. CIT (A) for AY 2006-07
2. Disallowance of loss on sale of shares
3. Adequate opportunity of hearing not provided
4. Confirmation of penalty imposed u/s 271(1)(c)

Analysis:
1. The appeal was filed against the order of Ld. CIT (A) for AY 2006-07. The Assessing Officer disallowed a loss claimed by the assessee on the sale of shares. The appeal was dismissed earlier but later recalled for hearing. The assessment was completed u/s 144 of the Income Tax Act, 1961. The assessee objected to the assessment order, but Ld. CIT (A) upheld the disallowance made by the Assessing Officer. The Ld. CIT (A) found that the appellant failed to provide convincing evidence for the claimed loss on the sale of shares of certain companies, leading to the confirmation of the disallowance. The appellant contended that they were not provided adequate opportunity for hearing.

2. The Ld. AR argued that the remarks in the assessment order were incorrect, and the assessee was not given a fair chance to present their case. The Ld. DR argued that sufficient notices were issued, and the Ld. CIT (A) had considered all relevant material before deciding on the matter. The Tribunal found that the assessee could not substantiate their claim before the Ld. CIT (A) and had not provided necessary details. However, the Ld. AR assured full cooperation if given another opportunity. Considering the circumstances and the high assessment made, the Tribunal decided to restore the issue to the AO for fresh adjudication after providing the assessee with a proper opportunity.

3. The Tribunal allowed ITA No. 2252/Del/2010 for statistical purposes, directing the assessee to cooperate with the AO in the assessment proceedings. ITA No. 1826/Del/2014 pertained to the penalty imposed u/s 271(1)(c), which was also restored to the AO for fresh adjudication after the completion of the assessment proceedings. Both appeals were allowed for statistical purposes, and the orders were pronounced on 4th October 2017.