Amish Manubhai Brahmbhatt Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad quashed the reassessment proceedings under section 147 of the Income Tax Act as intraday profit is less than limitation of Rs. 1,00,000/- for reopening of assessment u/s. 147 of the Act.
Facts- The assessee is an individual engaged in the business of share trading and income from other sources. The assessment was reopened based on the information received from the Mumbai Investigation Directorate vide letter/mail dated 27.03.2019, a search and seizure action was carried out on Shri Naresh Jain and his associates throughout the country by DIT (inv.)-2, Mumbai on 19/03/2019 which concluded on 21/03/2019. The search action covered the syndicate of persons who were acting in collusion and executing managed transactions on the stock exchange thus generating bogus long- term capital gains/bogus short-term capital loss/bogus business loss entries for various beneficiaries.
AO held that there is specific information that the assessee is involved in non-genuine and bogus capital gain obtained from the transactions of sale of shares of Scan Steel Ltd. and added the entire sale consideration of Rs.10,07,173/- as unexplained cash credit u/s. 68 of the Act. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the intraday sale of Scan Steel Ltd. by the assessee, there is a nominal profit of Rs.49792 only arrived by the assessee which is less than limitation of Rs. 1,00,000/- for reopening of assessment u/s. 147 of the Act. Further the reasons recorded for providing entries of long term capital gain, short term capital loss or business loss by the assessee. But none of the above three elements are found in the assessee’s case which is in intraday transaction whereby the nominal profit of Rs.49792 received by the assessee which is offered for taxation as his business income. Thus the very basis of reopening of assessment itself fails, therefore the reassessment made by the Assessing Officer has no legs to stand. In our considered view, the entire reassessment proceedings is liable to be quashed.
