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TMI Blog2024 (9) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... O). Therefore, on going through the instant facts, we observe that it is not a case where no additions were made in the hands of the assessee in respect of purchase/sale of shares of Nyssa Corporation, but the assessing officer, on consideration of the facts of the case, had come to the conclusion that though the assessee had not taken actual delivery of such shares of Nyssa Corporation, however the assessee s role was that of providing its PAN for transactions involving purchase and sale of shares of Nyssa, in exchange of certain payments, computed at 2% of the transaction value. Accordingly, in our considered view, this is not a case where no addition had been made in the hands of the assessee in respect of purchase/sale of shares of Nyssa Corporation, in which case, we could have considered the applicability of judicial precedents cited by the assessee. However, from the contents of the assessment order, which were also later confirmed by Ld. CIT(Appeals), it is observed that with respect to the very same script i.e. Nyssa Corporation, the assessing officer had in fact made certain additions in the hands of the assessee. Therefore, we are unable to accept the contention of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be quashed now. 5. The ld CIT(Appeals) also erred both in law and on facts in confirming the addition of Rs. 62,694/- out of Rs. 2,98,370/- when the amount of Rs. 2,98,370/- which came to be included in an amount of Rs. 4,62,640/- was already declared as income/ profit and hence entire addition including Rs. 62,694/- ought to be deleted in stead of partly confirming above addition. It be directed to be deleted now. 6. The ld CIT(Appeals) also further grievously erred both in law and on facts in confirming addition of Rs. 16,19,130/- made by ld AO merely on assumption without any iota of evidence ignoring the detailed explanations and confirmation of Anand Rathi Share Stock Brokers that no such transactions were ever transacted by the appellant. The addition made and confirmed on irrelevant grounds without any cross examination and merely on suspicion, deserves to be deleted. It be deleted now. 7. The ld CIT(Appeals) ought to have considered all the submissions with a speaking order commenting on each submission and decisions cited before him. The order passed in violation of principles of natural justice is illegal and bad in law. It be so held now. 8. The ld CIT(Appeals) miserabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, and all trades relating to this script were eventually settled account of Uttam Nakrani HUF . In the reply submitted by the broker, details of transactions entered by Uttam Nakrani HUF, contracts notes for such transaction, demat account of Uttam Nakrani HUF and bank account details for also submitted to the assessing officer. However, the assessing officer did not agree with the contentions of the assessee that there was no involvement of the assessee either in the purchase/sale of shares of Nyssa/client code modification and was of the view that the role of the assessee was of providing its PAN for all such transactions, which includes certain manipulated scrips in exchange of certain payments. Accordingly, the assessing officer added a sum of 2% of the transaction value, amounting to Rs. 16,19,130/- as income of the assessee. While passing the assessment order, the assessing officer made the following observations: 8.7 From the details unearthed during the proceedings, it is seen that the assessee was in repetitive contact with the broker during the relevant financial year. The assessee cannot deny the fact. It needs to be clarified that this is not a case of Client Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for providing its client code for manipulated transactions. 4. In appeal, Ld. CIT(Appeals) confirmed the additions made by the assessing officer. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals). 5. Before us, at the outset, the counsel for the assessee challenged the initiation of proceedings under section 147 of the Act, on the ground that while the 148 proceedings were initiated on the ground that assessee was engaged in purchase and sale of shares of Nyssa Corporation, however, at the time of passing of the final assessment order, the assessing officer made addition on a totally different basis. The counsel for the assessee submitted that while passing the assessment order, the assessing officer agreed to the contention that the assessee had in fact not purchased/sold shares of Nyssa Corporation, but had lent his PAN to the concerned broker, in exchange for a commission of 2% of the total value of transactions. The counsel for the assessee relied upon several judicial precedents in support of the contention that it is a well settled law that once additions in the order passed under section 147 of the Act is on an altogether di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration the fact that additions were made by the assessing officer with respect to shares of Nyssa Corporation. Therefore, we are unable to accept the contention of the counsel for the assessee on this issue. In the result, the assessee s challenge to reopening of assessment under section 147 of the Act, is dismissed. 7. This brings us to the merits of the case, wherein the counsel for the assessee submitted that the assessing officer and Ld. CIT(Appeals) has clearly misdirected themselves in confirming the additions on the basis that the assessee has fraudulently lent its PAN to the brokerage firm, Anand Rathi for earning commission at the rate of 2% on purchase and sale of shares of penny/bogus scrip by the name of Nyssa Corporation. The counsel for the assessee submitted that the assessee is the CEO of a reputed multinational firm, Hindustan Unilever Ltd and it cannot be contemplated that a person of such designation would be engaged in such activities. Secondly, the counsel for the assessee also drew our attention to the letter filed by the concerned brokerage firm, Anand Rathi, wherein has been confirmed that the assessee was not engaged in purchase/sale of shares of Nyss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm specifically submitted that the assessee had not carried out any transactions in the stated script and all the trades were carried out by Uttam Nakrani HUF, were shown in the name of the assessee, on account of mistake of one of the staff members of the brokerage firm. However, despite the assessee having submitted all the relevant facts before the concerned assessing officer, the assessing officer then took the alternate view that though the assessee had not purchased or sold the shares of Nyssa Corporation, however, the assessee had lent his PAN to the concerned brokerage firm, to enable it to trade in such penny stock and thereby earned commission at the rate of 2% of the trade value of such transactions. However, we observe that the assessee is CEO of a reputed multinational company Hindustan Lever Ltd and is based out of Singapore and in light of the letter submitted by the brokerage firm, there is seemingly no reason to come to the conclusion that the assessee had earned brokerage income by lending his PAN number in respect of transactions of a penny/bogus stock. The brokerage firm had specifically confirmed the mistake on the part of the staff members and therefore, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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