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TMI Blog2024 (10) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... eason to believe that income has escaped assessment without considering the objections raised by the petitioner. Decided in favour of assessee. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance: For the Petitioner(s) No. 1 : Mr Manish J Shah(1320). For the Respondent(s) No. 2 : DS Aff. Not Filed (N). For the Respondent(s) No. 1 : Mrs Kalpana K Raval (1046). ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. Manish J. Shah for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for learned advocate Mrs. Kalpana K. Raval for the respondent No. 1. 2. Rule, returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule for and on behalf of the respondent No. 1. 3. Having regard to the controversy in narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing. 4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the validity and legality of the notice issued under Section 148 of the Income Tax Act, 1961 (for short the Act ) for Assessment Year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee during the FY 2012-13 relevant to AY 20123-14 in the NSEL platform traded is as under:- Buy Turnover Sell Turnover Total Turnover 16,80,47,529.00 17,20,79,120.50 34,01,26,649.50 The return of income filed for the year under consideration has been analysed and it is found that assessee has shown total income of Rs. 5,98,540/-. Therefore, Income and investment appearing in return of income for the year under consideration does not match with the huge turnover on NSEL platform. 5 6 Findings of the AO: / Basis of forming reason to believe and details of escapement of income The information as well as details available has been perused and analyzed and it is strongly believed that NSEL exchange platform was misused and exploited by unscrupulous brokers and traders have launder huge sum of black money. The assessee had traded with Euro Asia Infracon Private on NSEL exchange platform through Twenty20 Commodities Pvt. Lid. (Broker Code: 37,550). The purchase and sales turnover of the assessee during the FY 2012-13 relevant to AY 20123-14 in the NSEL platform traded is as under:- Buy Turnover Sell Turnover Total Turnover 16,80,47,529.00 17,20,79,120.50 34,01,26,649.50 From the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out that from the details placed on record with the Additional Affidavit dated 13th September, 2024, there is no reference to the broker Twenty20 Commodities Private Limited. It was submitted that the respondent has also not considered the objections raised by the petitioner and merely rejected the same without application of mind by stating that the transactions of the petitioner with K. R. Chocksey Commodity Brokers Private Limited are not reflected in demat account only without considering that the same were already part of the books of the accounts and the profit earned by the petitioner is offered to tax in the return of income. 6.2. In support of his submissions, reliance was placed on the decision of this Court in case of Kapadia Money Changers Private Limited versus Assistant Commissioner of Income Tax reported in [2020] 423 ITR 633 (Gujarat) wherein, this Court has observed that the filing of objection and dealing with the same is not a mere empty formality and the Assessing Officer is required to consider the objections filed by the petitioner and if not found correct, the petitioner should be provided with the information with the Assessing Officer so as to enable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal Investigation). As stated earlier, the case of the assessee was reopened based on specific information received from the CEO, NSEL vide its letter dated 16.09.2016 forwarded to the Assessing Officer by the DDIT(Inv.)-II, Surat vide letter dated 15.03.2019 where it was found that the buy and sell transactions amounting to Rs. 16,80,47,529 Rs. 17,20,79,120.50 respectively, were carried out by the assessee with M/s Euro Asia Infracon Pvt Ltd through M/s Twenty20 Commodities Pvt Ltdand the same had not been disclosed by the assessee in the return of income filed for the AY 2013-14. Thus, the enquiries initiated by DDIT(I CI) have no bearing on the re-assessment proceedings in the case of the assessee and both are separate proceedings. It is pertinent to note that a copy of the SFIO letter dated 17.04.2017 and the duly filled in questionnaire was furnished by the assessee during the course of the assessment proceedings. However, no evidence regarding the reply submitted by the assessee to SFIO in respect of the said notice were furnished by the assessee. No covering letter or signed questionnaire was furnished by the assessee as per the records available with the FAO. Further, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Spot Exchange Limited. 9. It appears that the information available with the respondent-Assessing Officer has been denied by the petitioner and the same has only been brushed aside by the respondent-Assessing Officer while rejecting the objections filed by the petitioner without considering the same in detail. The respondent-Assessing Officer has only referred to such details by stating that the transactions disclosed by the petitioner are not reflected in the Demat account and the Assessing Officer had material in his possession to form a reasonable belief that the income has escaped assessment. Except such vague observations, the respondent-Assessing Officer has not dealt with the details submitted by the petitioner in the objections. 10. This Court in case of Kapadia Money Changers Private Limited (Supra) in such circumstances has observed as under : 10. This is a classic case of total non application of mind on behalf of the respondent while passing an order rejecting the objections filed by the petitioner pursuant to the issuance of notice under section 148 of the Act. The respondent has brushed aside the justification, explanation and reconciliation furnished by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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