Ajay Kumar Chiripal Vs ITO, Ward-43(1), Kolkata

Parties Involved

Facts Summary

The assessee, Ajay Kumar Chiripal, a stock broker registered with the Calcutta Stock Exchange, filed his original return under section 139(1) of the Income Tax Act, 1961 on 19.09.2017. Subsequently, a notice under section 148 of the Act was issued to the assessee on 26.02.2019. The assessee did not respond to this notice or to subsequent notices issued on 16.04.2019 and 30.09.2019. A show cause notice was issued on 22.10.2019, to which there was no response. A last show cause notice was issued on 27.11.2019, to which the assessee responded on 05.12.2019. The assessment was passed on 06.12.2019. The assessee claims that the reopening of assessment violated principles laid down by the Supreme Court and that the Assessing Officer arbitrarily treated clients’ accounts as undisclosed income.…

Legal Issues

• 1. Whether the reopening of assessment violated the principles laid down by the Supreme Court in GKN Driveshafts v. ITO
• 2. Whether the addition of 1% of the total credit in clients’ accounts as undisclosed income was arbitrary
• 3. Whether the addition of Rs.65 lakh under section 69A of the Act was justified

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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