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TMI Blog2023 (2) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... himself accepted as explained in the draft assessment order. Thus, the impugned assessment order has been passed in clear violation of the directions of learned DRP. Therefore, the assessment order is a nullity in the eyes of law as it is against the provisions contained under sub-section (10) and (13) of section 144C of the Act. That being the factual and legal position, we quash the final assessment order. - ITA No.574/Del/2021 - - - Dated:- 31-1-2023 - SHRI G.S. PANNU, HON BLE PRESIDENT AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For the Appellant : Sh. S.K. Agarwal, CA For the Respondent : Ms. Rashmita Jha, CIT (DR) ORDER PER SAKTIJIT DEY, JM: Captioned appeal has been filed by the assessee assailing the final assessment order dated 26.03.2021 passed under section 144C of Income-tax Act, 1961 (for short the Act ) pertaining to assessment year 2012-13, in pursuance to direction of learned Dispute Resolution Panel (DRP). 2. The dispute in the present appeal is confined to addition of amount of Rs.26,56,35,337/- purportedly under section 69A of the Act. 3. Briefly the facts relating to the issue in dispute are, the assessee is a non-resident co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be identified, whereas, the source of the balance amount of Rs.53,14,19,634/- could not be identified, nor explained by the assessee due to non-furnishing of details, the Assessing Officer added back the amount of Rs.53,14,19,634/- at the hands of the assessee by invoking the provisions of section 69A of the Act, while framing a draft completing the assessment order to the best of his judgment under section 144 read with section 147 and 144C(1) of the Act. 4. Against the draft assessment order so proposed, the assessee raised objections before learned DRP. In course of proceeding before learned DRP, the assessee explained the reason for non-compliance in assessment proceeding by stating that since it did not have any login id on the Income Tax e-filing portal, wherein notices under section 148 and 142(1) of the Act were issued, it could not respond to such notices. 5. Insofar as the merits of the addition is concerned, the assessee contended that during the year under consideration it had sold 92,50,000 equity shares of certain Indian companies through M/s. Bombay Stock Exchange for a net consideration of Rs.26,57,84,297/- and the amount was remitted outside India. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 265784297 0 0 Sale of equity shares of BSE held for more than 1 year. 2. R2011013Y6NE - 265635337 0 0 Sale of equity shares of BSE held for more than 1 year. 3. R2011013X7JA - 265635337 0 0 Sale of equity shares of BSE held for more than 1 year. 7. Since, the assessee, as alleged, did not comply with statutory notices, the Assessing Officer accepted the source of Rs.26,56,35,337/-, being the consideration received from sale of equity shares of certain companies made in M/s. Bombay Stock Exchange, to be explained. Whereas, he treated the balance amount aggregating to Rs.53,14,19,634/- as unexplained money of the assessee under section 69A of the Act, while framing the draft assessment order. 8. Before learned DRP, the assessee specifically contended that in the year under consideration, the assessee had sold 92,50,000/- shares of certain companies and received net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listed at para 2.4 above, Instead, the only grounds on which the AO contended that the additional evidence may not be admitted are that sufficient opportunity had been given to the assessee in the reassessment proceedings and that the bank statement had not been provided by the assessee for reconciliation. The Panel is of the view that the documents submitted by way of additional evidence are wholly relevant to determine the transactions and hence are required to be examined. As regards the AO's reference to sale in National Commodity Exchange of Rs. 27,05,30.735/- in the abovementioned reply dated 28.01.2021, it is seen that there is no addition on this account in the draft assessment order. 2.8 There is no dispute that the assessee had undertaken sale transaction of 92,50,000 shares of Rain Commodities Limited, which resulted in net sale consideration of INR.26,57,84,297/- as reflected in Table in para 2.3 above. As per the contract note dated 14.11.2011 issued by M/s DSP Merrill Lynch Limited (viz. document at sl. No. 1 of para 2.4 above) the consideration payable to the assessee on account of the sale of 92,50,000 shares of Rain Commodities Ltd. with the trade date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitory Participant charges of 1NR 148,960. The assessee also furnished a copy of the extract of the relevant bank statement in DRP proceedings which shows wire transfer as follows: Date posted Amount ($) Description Bank Reference 11/22 5,062,558.62 Wire type : Wire IN Date: 111122 Time : 1239 Et T r n . 2011112200172474 Seq: 06132614C9D01/304163 Orig: Dsp-Bse Client Account ID. 0012061099 SndBk: Cltibank N A ID: 0008PmtDet: 51006 Sale of Proceeds For 9250000 Shares Of Rain Commoditis Ltd. 903711220172474 2.10 Given the above, the Panel is of the view that the same transaction bearing the same trade date, share details and sale consideration has been reported separately by Mis DSP Merill Lynch, NSDL and Bombay Stock Exchange vide documents listed in para 2.1 above. There is nothing on record to show that there are three separate transactions. it is seen that the AO has accepted the transaction with value of INR 26,56,35,33Th in the order without any adverse inference regarding the taxability of the same under the Act. In the light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.53,14,19,634/-. Whereas, the Assessing Officer has travelled beyond the direction given by learned DRP and made addition of Rs.26,56,35,337/-, which he himself accepted as explained in the draft assessment order. Thus, the impugned assessment order has been passed in clear violation of the directions of learned DRP. Therefore, the assessment order is a nullity in the eyes of law as it is against the provisions contained under sub-section (10) and (13) of section 144C of the Act. That being the factual and legal position, we quash the final assessment order. 13. Before parting, we must observe, in recent times, we have come across several instances of open defiance and nonimplementation of directions issued by DRP by the Assessing Officers. This, in our view, is a very disturbing trend and reflects poorly on the credibility of the department and shakes the confidence of tax payers. Therefore, it goes against the Government s policy of adopting taxpayer friendly approach. In any case of the matter, the DRP is constituted by three senior Commissioner level officers of the department and is a dispute resolution mechanism set up by the Government under the statute. As per the St ..... X X X X Extracts X X X X X X X X Extracts X X X X
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