Hardik Jagdishbhai Patel Vs ITO (ITAT Ahmedabad)
Purchase + Sale = Income? ITAT Corrects AO’s Approach & Orders Re-Examination- Ex-Parte 147 Overturned: 2.11 Cr Addition on Turnover Struck Down- ITAT Allows Fresh Chance with Full Evidence on Share Trades
Assessee filed ROI declaring Nil income. Assessment was reopened on information that Assessee allegedly received accommodation entries of ₹86,22,817 in shares of Frontline Business Solutions Pvt Ltd & ACI Infocom Ltd. There was total non-compliance during reassessment, & AO, based on NSE data obtained u/s 133(6), treated the entire turnover of ₹2,11,36,467 (aggregate of purchases & sales) as unexplained money u/s 69A & completed ex-parte assessment u/s 147 r.w.s 144. CIT(A) upheld the addition.
Before Tribunal, Assessee explained non-compliance due to father’s serious kidney illness & death, CA’s death, & Assessee being in Canada. On merits, Assessee submitted demat statements & Kotak Securities statements showing purchases of ₹1,24,11,084 & sales of ₹85,07,813, establishing regular share trading with no LTCG claim & even short-term loss. Tribunal held that AO had wrongly added both purchase & sale values without verifying actual receipts. Tribunal noted that fresh evidences prima facie showed that the addition of ₹2.11 crore was incorrect. In the interest of justice, Tribunal set aside the matter to AO to examine all share transactions afresh & allow Assessee one more opportunity. Assessee was directed to ensure full compliance; AO free to decide on merits if Assessee defaults. Appeal allowed for statistical purposes.
