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TMI Blog2022 (11) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,07,298/- for which the assessee was sending confirmatory contra accounts duly signed by the clients, their full address and Pan Number details and further the summery list shown clients name address Pan Number Aadhar Card Copy etc. As seen from the revision order that the Ld. PCIT after perusal of the material available on record and found that the issues pointed out in the show cause needs verification. PCIT held that the assessee s claim with regard to the transaction pertaining to the shares and the resultant gain/profit/loss is not verifiable. During the course of original assessment proceedings, the assessee failed to furnish the said details and evidences. That s why the assessee himself offered 8% of difference amount of bank credits and debits as presumptive income and entire amount was required to be treated as unexplained income and added to the total income of the assessee. Therefore invoking Explanation 2(a) of Section 263(1) PCIT set aside the assessment order passed by the Assessing Officer as erroneous and prejudicial to the interest of revenue. PCIT pointed out the issues mentioned in the show cause notice needs verification but it is seen from the Paper Boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom main broker of Bombay, thus net receipt of Rs. 56,06,630/-. The assessee, to avoid further litigation, to obtain peace of mind, to maintain liquidity of business as well as to maintain the client, voluntarily offered 8% income on the above net receipt of Rs. 56,06,630/- which comes to Rs. 4,48,530/-. The Ld. A.O. on verification of detail of transaction were called for from the main broker Kirti R Shah Share Stock Brokers Pvt. Ltd. by issuing summons u/s. 133(6) held that the assessee has made profit of Rs. 2,27,945/- from speculative transaction and incurred loss of Rs. 25,96,337/- in the delivery based share transaction. Thus the Ld. A.O. added Rs. 4,48,530/- as the business income and Rs. 2,27,945/- as the speculative profit for the relevant assessment year and determined the total income of Rs. 11,74,930/- and demanded tax thereon. 4. This assessment order was revised by Ld. PCIT by issuing a show cause notice that the Assessing Officer failed to verify the details or any supporting documents with regard to the amount of Rs. 56,06,360/- considered as contract receipt by the assessee. As there was no details of such contract receipt, persons from whom received, mode of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission dated 21/11/2018. Hence, notice alleging that details of contract receipts, person from whom such receipts received, mode of receipt etc. is not available in scrutiny records is devoid of merit and facts of our case. I therefore request to drop the proceedings if the sole reason for proposing revision is on this ground alone. The AO on the basis of detailed scrutiny and verification alone has assessed the income @8% of such receipts by application of mind. The transactions as entered into are supported by contract notes, certificate issued in Form 10DB, confirmation of clients and broker who has independently confirmed the transactions made. Hence, by no stretch of imagination, it can be regarded as undisclosed/unexplained income on the basis of scrutiny records available on file. Your goodselfs kind attention is drawn to the contra confirmatory account of the assessee from the main broker Kirti R Shah Share and Stock Broker P. Ltd., submitted during the assessment proceedings by me on 06/10/2018, the details of the account run as under. (i) Opening balance of assessee on 01/04/2015 Rs. Nil. (ii)Total de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Kirti R Shah stock broker P. Ltd. Further, whatever payment received by him from his customers were transferred or ultimately credited in the Bank account of Kirti R Shah stock broker P. Ltd., and thus assessee had not made any investment from this or any other bank account or in cash as enquired by the AO in the notice letter dated 22/10/2018. It is pertinent to note that being a share sub broker the assessee was entitled to 1% commission on total volume of trading in equity from his main broker, instead, had shown this income at Rs.1,71,570/- and then again by reply letter dated 19/12/2018 he had offered 8% income for the figure Rs.56,06,630/- (difference between bank transaction credit Rs.17683099/- and banks account transactions debit amount Rs.12076469/-) to buy peace, to avoid further litigation and in the interest of his business and further more to co op with the department he had paid the demand of Rs.2,22,120/- on the assessed income in time. Hence, at no stretch of imagination the order passed is either erroneous or prejudicial to the interest of revenue. [3] I may draw your goodselfs kind attention to the fact that all the records as called for vide para 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is the issue found error in the order of AO and still directed him to make assessment de novo. These things contradict each other. The act of the CIT calling for making further enquiries and assessment de novo showed that the CIT was not sure as to the original order being erroneous. The revision was not therefore justified. Reliance is place in the matter of Vardhman Industries Ltd. v. Dy. CIT (2017) 153 TR (A) 566 (Chand-Trib). [6] It is pertinent to note here that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the assessing officer. Every loss of revenue as a consequence of an order of the assessing officer cannot be treated as prejudicial to the interests of the revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue, unless the view taken by, the Income Tax Officer is unsustainable in law. The power to revise cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue in as much as the AO had failed to correctly observe facts on record in relation to the transaction with Broker Kirit R Shah share stock brokers Pvt. Ltd. 2.2. That in the facts and circumstances of the case as well as in law, the Ld. Pr. CIT has grievously erred in law and on facts in holding that the order of assessment passed u/s 143(3) on 20-12-2018 by AO was erroneous and prejudicial to interest of Revenue. It is therefore prayed that the order of revision u/s. 263 was illegal bad in law or in alternative the entire sale price was not undisclosed income. 7.1. The Ld. Counsel Mr. S.N. Divetia appearing for the assessee filed before us a Paper Book containing various details filed by the assessee before the Assessing Officer during the course of assessment proceedings, more particularly in response to the notices issued u/s. 142(1) calling for various details and submitted that after through verification of the entire transaction, the Assessing Officer accepted the 8% presumptive income offered by the assessee. The Ld. A.R. further submitted that it is evident beyond doubt that not only details regarding the amount of Rs. 56,06,630/- but the entire amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Certificate of STT paid as well as ledger account of Trading and profit and loss account etc. and submitted that the assessee had not made many gain or loss as shown in the trading account of the main broker firm namely KIRTI R. SHAH SHARES AND STOCKBROKERS P. LTD. The gain or loss is attributed/allocated to different clients who had made trade in equity through the assessee with the main broker of Bombay. Thus non speculative loss of Rs. 25,96,337/- as well as speculative profit of Rs. 2,27,945/- were allocated and belonging to different clients/customers. The assessee has no right to have profit or loss on this equity trading account for the year under consideration. 9.1. We also note that the Assessing Officer vide notice dated 09/11/2018 (i) requested the assessee to furnish the source of investment of Rs. 1.76 crores with proper evidences. In the absence of any evidence why the same should not be added as the total income of the assessee as unexplained investment u/s. 69 of the Act. (ii) requested to submit all the details mentioned in the trading statement provided by the assessee. The assessee responded on 21/11/2018 stating that the total payments to the main broker was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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