The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) for re-adjudication of additions made under section 69 of the Income Tax Act,1961 towards the purchase and sale of shares without sufficient evidence.
Devang Jitendra Mashru, the appellant assessee was an individual. For Assessing the Year 2010-11, the assessee did not file the return of income, and the assessing officer, based on the information noticed that the assessee had sold immovable property during the year under consideration. The assessing officer therefore reopened the assessment under section 147 of the Income Tax Act and accordingly issued a notice under section 148 of the Income Tax Act to the assessee.
The assessee appealed against the order passed by the Commissioner of Income Tax for confirming the assessing officer’s addition of Rs.37,93,000/- as undisclosed income about the sale of property and also an addition under section 69 of the Income Tax Act towards the purchase and sale of shares amounting to Rs.6,36,961.
Satyaprakash Singh, the counsel for the assessee contended that the assessee was not aware of the proceedings of income tax and hence did not represent the case and prayed for one more chance to represent the case before the lower authorities.
Rajesh Mesharam, the counsel for the department contended that the assessee was a habitual defaulter in not representing the case and that he had not appeared before the assessing officer as well as the Commissioner. Hence, the additions made should be confirmed.
The Bench observed that the additions made by the assessing officer are based on information from the Income Tax data and due to lack of details the assessing officer has treated the entire income from the sale of the property as unexplained and the addition towards the share transaction was also made for the same reason that no information was available about the transaction and hence added as income under section 69 of the Income Tax Act.
The two-member bench comprising Abt T Varkey (Judicial) and Padmavathy (Accountant) remanded the matter back to the Commissioner for considering the facts of the case and in the interest of justice and fair play and for giving one final opportunity to the assessee.
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