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TMI Blog2025 (1) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) TMI 18 - DELHI HIGH COURT] . In the case of CIT Vs. Mohammed Juned Dadani [ 2013 (2) TMI 292 - GUJARAT HIGH COURT] wherein it was held that the ground on which reopening of assessment was based and no addition was made by the AO in the order of reassessment, he could not make additions on some other grounds which did not form part of the reasons recorded by him. Assessee appeal allowed. - Shri T.R. Senthil Kumar, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member For the Assessee : Shri Rasesh Shah, A.R. For the Revenue : Shri A.P. Singh, CIT-DR ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the Revision order dated 16.03.2024 passed by the Principal Commissioner of Income Tax-3, Ahmedabad arising out of the reassessment order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year 2013-14. 2. Brief facts of the case is that the assessee is an individual engaged in investment in shares, trading of shares securities and derivatives and Future and Option. Since the turnover from share trading activity was less than the prescribed turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits in equity/derivate trading of penny stock shares of M/s. Pradip Overseas of Rs. 23,30,537/- during the year under consideration. These penny stock shares had been used to facilitate the unaccounted income by way of LTCG/Short term capital loss, etc. On perusal of bank statement furnished during the reassessment proceedings, it was noticed that the assessee had received huge credit from certain entities and same has been invested in securities/share market. However, the explanation of such credit transaction was not called for by the A.O. during the course of reassessment proceedings. Moreover, on perusal of computation of income, it was noticed that you had shown short term capital loss of Rs. (-) 38,77,898/-. On perusal of statement of short-term capital gain/loss, it is noticed that the assessee had purchased equity shares of Rs. 5,90,69,497/- and claimed short term loss of Rs. 38,77,898/- during the year. However, the assessee had shown meager income in her Return of Income during the year under consideration. Therefore the investment made in securities/share does not commensurate with assessee s income. Therefore, the amount of Rs. 5,90,69,497/- for investment in secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s. 263 on the ground that assessee was not able to explain the credit entries received from certain entities and on the perusal of the return of income it was noticed that assessee purchased the equity shares of Rs. 5,00,60,467/- and claimed short term capital loss of Rs. 38,77,898/ Accordingly, your honour has held that amount of Rs 5,90,69,467/- should be treated as unexplained investment in securities and shares. Arguments: 6. At the outselt it is submitted that the reasons recorded by the assessing officer were factually incorrect as assessee didn't earn the profit in equity/derivative trading by way of transaction in shares of M/s. Pradip Overseas of Rs. 23,30,537/-, Even in the notice issued u/s. 263, although your honour has raised this issue as referred in the reasons recorded, your honour didn't give any material in support of this statement made in the notice issued u/s. 263. Even this addition was not proposed in the show cause notice issued u/s, 263. 7. The assessee explained vide letter dated 15.12.2021 filed in the course of assessment proceedings that that assessee derived intraday profit of Rs. 1,839.84/- and incurred short term capital loss of Rs. 10,53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved against the Revision order, the assessee is in appeal before us raising the following Grounds of Appeal: 1. On the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in passing the order u/s. 263, although the assessment order passed u/s. 147 r.w.s 144 of the I. T. Act, 1961 was neither erroneous nor prejudicial to the interest of the revenue. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in setting aside the assessment with the direction to pass fresh assessment order after treating the entire sale proceeds of scrips discussed in revision order as unexplained deposits/receipts and further directing to make addition of unexplained investments of source of such investments and frame the assessment de novo. 3. It is therefore prayed that above order passed by Pr. CIT u/s. 263 may please be quashed or modified as your honours deem it proper. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 8. We have heard rival submissions at length and perused the materials available on record including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f revenue-Whether where Assessing Officer has taken a particular view on basis of evidence produced before him, it is open for Commissioner, in revisional proceedings under section 263, to take a different view on same material Held, no Whether on facts stated under heading 'Business disallowance Excessive or unreasonable payments' when Assessing Officer had duly verified all details from books and records, and had made no addition in regular assessment, Commissioner was justified in invoking revisional jurisdiction under section 263- Held, no 10. Further when the A.O. having recorded the reasons for reopening the assessment and having formed a belief that income of the assessee had escaped assessment, but not made any addition in the reassessment proceedings, in respect of the issue that is the subject matter of reopening. Thus the very basis of formation of belief by the A.O. vanishes. Thus the Ld. A.O. could not have framed any reassessment per se. Logically the Ld. A.O. ought to have dropped the reassessment proceedings instead of passing a separate reassessment order. Thus the reassessment order per se framed by the A.O. is not sustainable in the eyes of law. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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