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TMI Blog2017 (2) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... s recorded in the books of accounts maintained by the assessee, which net profit ratio of 0.59% on recorded transactions was accepted by Revenue while framing assessment order dated 15.12.2010 passed by the AO u/s 143(3) of the Act of 1961. In our view the end of substantial and complete justice will be met in the instant appeal keeping in view peculiar facts of the case, if un-recorded transaction in the books of accounts which is reported by BSE to have been entered by the assessee to the tune of ₹ 7,52,65,347/- is also brought to tax by estimating net profit @ 0.59% on ₹ 7,52,65,347/-, wherein income is sustained/confirmed in the hands of the assessee to the tune of ₹ 4,44,066/- and rest of the addition stand deleted. We order accordingly. - I .T.A. No.1078/Mum/2012 - - - Dated:- 22-2-2017 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Mr. Milind V. Sahasrabudhe For The Revenue : Mrs. N.V. Nadkarni, DR ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 1078/Mum/2012, is directed against the appellate order dated 26-12-2011 passed by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1.2008 19,97,248 7.1.2008 66,64,353 5,68,134 8.1.2008 36,19,980 39,39,390 10.1.2008 75,40,524 77,26,908 20.2.2008 7,58,640 11.3.2008 11,40,961 7,12,190 Total 7,52,65,347 The assessee vide her letter dated 30-11-2010 denied the above transactions. The contents of the letter are as under:- DECLARATION I, Mrs. Manjiri P.Shah, having PAN :ANQPS5900A residing 302, Abich Apts., Sarojini Naidu Road, Mulund (W), Mumbai 400080, in my capacity as individual, I hereby solemnly affirm as under: 1. The Income Tax Authorities have issued notice under Section 143(2) and Section 142(1) of the Income-tax Act, 1961 for the A. Y.2008-09 for the purpose of scrutiny assessment. 2. During the course of assessment proceedings, the Ld. Assessing Officer asked for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee does not absolve the assessee from her responsibility. The A.O. observed that the amounts mentioned in AIR do not indicate whether the amounts mentioned therein relate to purchase or sale of shares . The A.O. observed that the assessee has purchased shares of ₹ 24,14,51,096/- and sold the shares of ₹ 24,28,98,229/- as recorded in books of accounts maintained by the assessee, thereby the assessee earned profit of ₹ 14,47,132/- which comes to a profit ratio of 0.59%. The A.O. brought to tax the unrecorded transaction of ₹ 7,52,65,347/- by applying profit ratio of 2% on unrecorded transactions, which comes to ₹ 15,05,306/- which was brought to tax by the AO as income of the assessee vide assessment order dated 15.12.2010 passed by the AO u/s 143(3) of the Act. 4. Aggrieved by the assessment order dated 15.12.2010 passed by the A.O. u/s 143(3) of the Act, the assessee filed first appeal before the ld. CIT(A) and made the following submissions :- It is humbly submitted that from these very statements in the assessment order it is clear that the very base for additions is very very vague and non verifiable from the view point of your appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Department by the stock exchange because admittedly there can be no error in STT charging and payment by Stock Exchange. 08. It is humbly submitted that in light of the said irrefutable evidence, the addition, which is solely based on the presumption of accuracy of stock exchange report which itself is very vague and without any money or transaction trails, needs to be set aside as the appellants have fairly established the fact of inconsistency in Stock Exchange reports. 09. It is also humbly submitted without prejudice that even the estimate of profit on alleged transactions has been placed at much higher levels of 2% vis a vis admitted average profit margin of 0.59% on the transactions. 10. In light of the fact that appellants are really constrained on figuring out way to deal with allegations which are based on thin air like statements sans any details. it is humbly submitted that if these submissions are perceived to be not adequate on any count; the fact may be disclosed to appellants and further fair opportunity be granted to deal with any apprehensions left in the matter and to submit any additional evidences as may be necessary. The ld. CIT(A) after going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action reflected in that very certificate at ₹ 32,94,49,013.30. Here in appeal by taking ground No. l, the appellant is asking the rebate u/s. 88E for STT of ₹ 2,56,963/- on one hand, but is denying that total transactions are not of the volume reflected in same certificate at ₹ 32,94,49,013.30. The appellant in his trading account has shown sale of shares at ₹ 24,28,98,229/- and has shown purchases at ₹ 24,14,51,096/- on the other hand. Against this, the AIR information reflects transaction amounting to ₹ 20,10,44,369 out of which transactions for the amount of ₹ 7,52,65,347/- have not been owned up by the appellant. If sale transactions reflected by the appellant are not owned up transactions though obtained from AIR enquiry of ₹ 7,52,65,347/-, the total comes to ₹ 31,81,63,576/-, which is very close to the volume of transactions reflected in Form 10DB where the STT of ₹ 2,56,963/ - has been charged on transaction amounting to ₹ 32,94,49,013.30. In other words, the total of these two figure i.e total of sale proceeds shown by appellant at ₹ 24,28,98,229/- together with not accepted transactions worth ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m BSE was produced wherein details of STT paid was reflected. Thus , no addition can be made based upon AIR information was the contention of learned counsel for the assessee. The assessee relied upon various case laws which are placed in paper book filed by the assessee with the tribunal to contend that additions based on AIR information is not sustainable. 7. The ld. D.R. on the other hand submitted that the assessee failed to reconcile the transactions as reported in AIR information and also confirmed by BSE . It was submitted that even during the proceedings before the ld. CIT(A), the assessee failed to reconcile the transactions as reported by BSE for AIR information and the books of accounts maintained by the assessee , hence, the ld. CIT(A) was quite right in confirming the assessment order passed by the A.O. u/s 143(3) of the Act was the contention of learned DR before the tribunal. The learned DR relied upon the orders of the authorities below. 8. We have heard rival contentions and also perused the material available on record including the case laws relied upon. We have observed that the assessee is engaged in the business of share trading. The assessee is deali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 32,94,49,013.30 reported by BSE through AIR information , and not against the recorded trade transactions of ₹ 24,28,98,229/- as recorded in books of accounts maintained by the assessee. The case laws relied upon by the assessee are distinguishable and hence cannot be relied upon so as to the extent of quashing the additions made by the authorities below as in the instant case the assessee had herself admitted to have paid STT of ₹ 2,56,963/- on total traded transactions of ₹ 32,94,49,013.30 . The assesse is contending even before us that the assessee had purchased the shares worth ₹ 24,14,51,096/- and sold the shares of ₹ 24,28,98,229/- for which assessee had filed copies of contracts notes in paper book filed before the tribunal . The AO has brought to tax total un-reconciled and un-recorded traded transactions to the tune of ₹ 7,52,65,347/- wherein profit of 2% was estimated as income of the assessee to the tune of ₹ 15,05,306/- which was brought to tax vide assessment order dated 15.12.2010 passed by the AO u/s 143(3) of the Act , which was later confirmed/sustained by learned CIT(A) vide his appellate order dated 26.12.2011. ..... 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