Aereo Dealcomm Pvt. Ltd. Vs ITO (ITAT Kolkata)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals)-19, Kolkata, dated 30.07.2019 for Assessment Year 2009-10, challenging both the reopening of assessment under Section 147 and the addition of Rs.15,31,700 made under Section 68 on account of alleged income arising from Client Code Modification (CCM) transactions.
The assessee had originally filed its return declaring income of Rs.3,10,460, which was processed under Section 143(1). The assessment was subsequently reopened by notice under Section 148. The reassessment under Section 143(3) read with Section 147 resulted in an addition of Rs.15,31,700 as unexplained cash credit representing alleged net income earned through CCM. The CIT(A) upheld both the reopening and the addition.
Before the Tribunal, the assessee contended that the reopening reflected complete non-application of mind. It argued that it had not entered into any derivative transactions during the relevant year and that the information received by the Assessing Officer from the Investigation Wing was factually incorrect. It was submitted that the Assessing Officer failed to conduct any preliminary verification before recording reasons for reopening. The assessee also challenged the reopening on the grounds that approval under Section 151 was not properly obtained before issuance of notice, the objections against reopening were not disposed of by a separate speaking order, and the officer who recorded the reasons and issued notice lacked jurisdiction. On merits, the assessee relied on a response received from the National Stock Exchange (NSE) under Section 133(6) stating that there were no client code modification details relating to the assessee in the Capital Market and Currency Derivatives Segment during the relevant period.
