Case Law Details
Saarthak Vanijya India Pvt Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi held that order passed by AO u/s 147 of the Income Tax Act not borne out of any record is non-est in the eyes of law.
Facts- The assessee is engaged in the business of manufacturing of other paper articles. Return of income for AY 2013-14 was filed by assesses on 16.09.2013. Assessment u/s 153A was completed on 31.03.2016. The case of the assessee was re-opened u/s 148 of the I.T. Act, 1961. Accordingly, notice u/s 148 of the I.T. Act, 1961 dated 17.03.2021 was issued and served on the assessee. The Assessing Officer disallowed the loss of Rs.99,42,838/- and added it back to the total income of the assessee being bogus loss and also added an amount of 3,27,45,176/- being 2% of commission for availing bogus loss.
Notably, from the data made available under Project Falcon on the ITBA, the AO held that the assessee has purchased stock options for an aggregate / premium value amounting to Rs.82,14,35,931/- and sold the same for an aggregate premium value of Rs. 81,58,22,900/- resulting loss of Rs. 99,42,838/-.
Conclusion- Hence, it can conveniently held that the reasons derived by the AO on the alleged ground of income escaping assessment aggregating to Rs.4,26,88,014/- which consists of Rs.99,42,838/- being claim of artificial loss from trade reversal on Stock Exchange and the belief that the assessee has incurred an amount of Rs.3,27,45,176/- as commission paid for obtaining a loss of Rs.99,42,838/- is beyond logic and not borne out of any record. Hence, the order passed by the Assessing Officer u/s 147 dated “Nil” is to be treated non est in the eyes of law.
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