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TMI Blog2024 (12) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... IS BAD IN LAW: 1. On the facts and in the circumstances of the case and in law, the Learned Pr. CIT 27 erred in treating the order under section 147 r.w.s 144B of the Income- tax Act, 1961 (the Act) dated 24 March 2022 (re-assessment order) as erroneous and prejudicial to the interest of the revenue and thereby setting aside the order. 2. On the facts and in the circumstances of the case and in law, the Learned Pr.CIT 27 failed to appreciate the fact that the original assessment order as well as re-assessment order have duly considered the transaction of NSEL commodity loss of Rs 8,68,70,608 whereby the orders passed are neither erroneous nor prejudicial to the interest of revenue. 3. The Learned Pr. CIT. Mumbai-27 ought not to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits in commodity trading in NSEL by Client Code Modification (CCM) were the assessee is said to have entered into bogus trades creating a loss of Rs. 8.68 crores in its P & L Account which has been set off by the assessee against its regular business income. The ld. AO passed the assessment order u/s. 147 r.w.s. 144B of the Act dated 24.03.2022 determining total income at Rs. Nil by duly accepting the returned loss. 4. The ld. PCIT vide notice u/s. 263 dated 20.02.2024 invoked the revisionary powers and held that the assessment order is erroneous and prejudicial to the interest of the revenue thereby setting aside the assessment order with the direction to pass fresh assessment order for the reason that the assessee was one of the benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 203 ITR 108 (Bom) (HC) b. Synthetic & Art Silk Mills Research Association Vs. CIT (Exemption) [2024] 158 taxmann.com 264 (Mumbai -Trib.) c. Impact Foundation (India) Vs. CIT (Exemptions) [2023] 149 taxmann.com 189 (Mumbai-Trib.). 7. The ld. DR on the other hand controverted the said fact and stated that the ld. AO has not inquired into the modus operandi of the Client Code Modification in which assessee was one of the beneficiary. Further, the ld. DR contended that the ld. AO in the assessment order has merely reproduced the submission of the assessee but had failed to give a detailed finding as to how the assessee was not a beneficiary of the said scam. The ld. DR iterated that the entire submission of the assessee was merely on Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to have earned income from the said transaction until July, 2013, until the government had stopped the trading activities at NSEL and a circular dated 31.07.2013 was issued by NSEL suspending trading in one day forward contracts and deferring settlement to 15 days by stating that there has been loss of trading interest in the market due to underlying uncertainties leading to trade inequilibrium. The circular had also merged the delivery and settlement of outstanding contracts, which the assessee contends that it was also a victim of NSEL's scam, thereby resulting in a loss of Rs. 8,68,70,608/- which was carried out through the two recognized exchange brokers of NSEL amounting to Rs. 3,89,03,405/- relating to ARCL and Rs. 4,79,67,203/- re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchase transaction was Rs. 6,311 crores as per the investigation report. Out of the same, the maximum Client Code Modification (CCM) were done by ARCL amounting to Rs. 3,073.48 crores and on summon issued u/s. 131 of the Act, its president Shri. Chetan Pitamber Bharkharda revealed that there was no physical delivery of goods in any of the transactions carried out on NSEL platform and the same has been reproduced in the ld. PCIT's order. The ld. PCIT had also discussed the details of the investigation done by the investigation team and the Serious Fraud Investigation Office (SFIO). That being so, the ld. AO has not verified the CCM data related to the assessee neither from the assessee nor from its brokers pertaining to the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and more precisely the issue for which the reassessment was initiated. In the absence of the same, we find no infirmity in the order of the ld. PCIT in holding the assessment order to be erroneous in so far as it is prejudicial to the interest of the revenue. It is also pertinent to point out that the case laws relied upon by the assessee is not applicable in the present case as they are distinguishable on the facts of this case and this is evidently not a case were the ld. AO after considering the submission of the assessee has taken one of the possible view. It is a case were the ld. AO has not dealt with or inquired into the issue which was the subject matter of the reassessment. We therefore are inclined to dismiss the grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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