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TMI Blog2023 (6) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed the overall nature of the fraud committed but failed to record how the same to be related to the assessee. On perusal of records, it is noticed that there is a gap in understanding of facts with regard to the speculative losses incurred by the assessee, which, according to the AO, cannot be set off against the normal business income. A perusal of the P L Account evidences that the assessee had only income from non speculative business and does not have any speculative loss which he has set off against any income. Therefore, we see merit in the contention of AO while recording the reasons, has not applied his mind and has not brought out any factual finding with regard to the impugned addition. It is also noticed that the assessee s request with regard to the workings of the impugned addition and the statements recorded from President Anand Rathi Commodities was not shared with him by the lower authorities. Reopening u/s 147 has been done without recording any specific reasons pertaining to the assessee and without linking the information received from DDIT (Inv) specifically to the assessee - Decided in favour of assessee. - I.T.A. No. 358/Mum/2023 - - - Dated:- 16-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 68 of the Act without providing copies of information received by the Department which violates Principles of Natural Justice, Audi Alteram Partem. 2.2. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in making an addition of Rs. 17,40,120/- under section 68 of the Act without providing the statement of Mr. Chetan Pitamber and an opportunity for cross-examination, which violates Principles of Natural Justice, Audi Alteram Partem. 2.3. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in making an addition of Rs. 17,40,120/- without providing the details of the said amount arrived by the National Faceless Assessment Centre. 2.4. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in making an addition of Rs. 17,40,120/- by alleging that the same is a bogus loss/capital gain whereas the same is the gross value of transactions made by the assessee. 2.5. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in making an addition of Rs. 17,40,120/- without considering the submissions and documents presented by the Assessee in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer has relied on the information received from Investigation Cell and in spite of various requests, the copy of statement recorded of Chetan pitamber Bharkhada, President of M/s Anand Rathi Commodity Ltd and the information copy received from Investigation Cell was not furnished to the assessee. The assessee also submitted that the details on the basis of which the addition was made by the Assessing Officer were not clear. The assessee also submitted that all transactions with respect to the trading done by the assessee have been recorded and offered to tax already and that these incomes are non speculative in nature. The CIT(A) did not accept the submissions of the assessee and held that the reopening done by the Assessing Officer under section 147 is valid by relying on the decision of Bombay High Court in the case of Suresh vs Additional CIT (2017) 81 taxmann.com 346 (Bom). The CIT(A) also dismissed the grounds raised by the assessee on merits. Aggrieved, the assessee is in appeal before the Tribunal. 5. The Ld.AR submitted that the notice under section 148 where the reasons are recorded that the assessee has made bogus loss and had set it off against income is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation Cell where Shri Chetan Pitamber Bharkhada, President of M/s Anand Rathi Commodity Ltd have given a statement that there were client code modifications of transactions in which there was no physical delivery of the goods on NSEL platform and that the said scam was investigated by DDIT(Inv). The copy of the reasons recorded is reproduced as below:- GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 24(1), MUMBAI To, RAVI GOPAL TRIVEDY 402 SHEETAL A WING.LOKHANDWALA COMPLEX ANDHERI WEST MUMBAl 400053, Maharashlra India PAN: ABCPT1927A Assessment Year: 2014-15 Dated: 09/11/2021 DIN Letter No : ITB A/AST/F/1 7/2021 -22/1 036782070(1) Sir/Madam/M/s Subject: Reasons for re-opening u/s 147 1. In this case information was received from the DDJT(lnvrUnit-6(3)), Muitibai that the Serious Fraud investigation Office (SFIO) has carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rathi Commodities Pvt.Ltd (ARCL) as the maximum client code modification to the tune of Rs 3,073 Rs Cr were done by; ARCL on: 11.03.2019 and statement of Shri Chetan pitamber Bharkhada, President Anand Rathi Commodities Ltd (ARCL) recorded on 12 03.2019 The broker had also stated that client code modification was indeed done. The broker had also stated that there was no physical delivery of goods at any time in all the trades earned out on the NSEL platform. After trading on NSEL was suspended. ARCL did not fulfill payment obligations against sale contracts the trades in respect of which the loss is claimed by the clients. No goods wherein the possession of clients either in his hand or in the possession of NSEL on his behalf. Therefore, a conclusion may be drawn that these losses are speculative losses which are not allowable to be set off against normal business income of the clients. 4. In view of the above and by reason of the failure on the part of the assessee to disclose fully truly all material fact necessary thereto in his return of income, I have reason to believe that the income to the extent of Rs. 17,0,120/- due to trade of client code modified transaction i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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