Basant Sobhraj HUF vs. DCIT, Circle-1(1), Raipur

Parties Involved

Facts Summary

The assessee, proprietor of Basant Sobhraj (HUF), is engaged in the business of contractual works. He filed his original Income Tax Return (ITR) of the relevant year on 02.08.2016 declaring income of Rs.23,15,470/-. Later, based on the information that the appellant assessee had taken certain accommodation entries in the garb of Short Term Capital Gains (STCL) from penny stock, the assessee’s case/assessment was reopened under section 148 of the Act. The Ld. Assessing Officer (AO) taxed the STCG of Rs.85,20,967/- holding the same as bogus. Further, the Ld. AO also worked out the commission expenses of Rs.59,633/- incurred by the assessee for getting accommodation entries in the garb of STCL and taxed the same under section 69C of the Act. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal observing as under : The relevant facts giving rise to this appeal are that the assessee, proprietor of Basant Sobhraj (HUF), is engaged in the business of contractual works. He filed his original Income Tax Return (‘ITR’) of the relevant year on 02.08.2016 declaring income of Rs.23,15,470/-. Later, based on the information that the appellant assessee had taken certain accommodation entries in the garb of Short Term Capital Gains (STCL) from penny stock, the assessee’s case/assessment was reopened under section 148 of the Act. The Ld. Assessing Officer (‘AO’), being dissatisfied with the explanation of the assessee reproduced from page 62 to 81 of the assess…

Legal Issues

• 1. Whether the CIT(A) passed the ex-parte order without providing adequate and reasonable opportunity of being heard and without considering the submissions filed by the appellant?
• 2. Whether the CIT(A) dismissed the appeal without adjudicating the grounds on merits and only on the basis of alleged non-compliance?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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