Case Law Details
ITO Vs RajendraHastimal Mehta (HUF) (ITAT Mumbai)
ITAT Mumbai held that addition u/s. 68 of the Income Tax Act towards unexplained cash credit unsustainable as the addition was made by AO on the basis of presumptions and conjectures and without conducting any independent investigation.
Facts- The assessee is engaged in the business of share trading and also earn commission income. AO noted that the assessee has entered into share transactions of M/s Rockon Fintech Ltd of Rs.4,28,690/- and M/s Vax Housing Finance Corp Ltd of Rs. 4,77,941/-. AO found that the assessee has not filed the return of income and therefore has a reason to believe that the income has escaped assessment and issued notice u/sec 148 of the Act. The AO has dealt on the transactions of the purchase and sale of shares of M/s Rockon Fintech Ltd, were the assessee has earned a profit of Rs.73,586/- and similarly in respect of purchase and sale of Shares of M/s Vax Housing Finance Corporation Ltd, the assessee has incurred Loss of Rs.42,138/-and after claim of setoff of loss with the short term capital gains, the net income of Rs.31,448/- was offered for taxation. AO observed that there is a no correlation of the price rise and fall of the share price and was not satisfied with the explanations and material information and came to a unilateral conclusion that transactions are not genuine and made addition of short term capital gains as unexplained cash credit u/sec 68 of the Act of Rs.73,586/- and rejected the short term loss earned of Rs.42,138/-.
CIT(A) partly allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the AO has not conducted any independent investigation and made additions on presumptions and conjectures. The CIT(A) has dealt on the facts, provisions of law and deleted the additions. The Ld. DR could not controvert the findings of the CIT(A) with any new cogent material or information to take different view. Accordingly, there is no infirmity in the order of the CIT(A) on the disputed issue and uphold the same and dismissed the grounds of appeal of the revenue.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
