ITO Vs. Alpesh Manharlal Mistry

Parties Involved

Facts Summary

The assessee, Alpesh Manharlal Mistry, is an individual engaged in the business of job work of wooden furniture. His total income for the Assessment Year 2012-13 was below the basic exemption limit, and he was not required to file a Return of Income. However, he opened a demat account with the intent to earn short-term gains. He undertook trading in equity and F&O through the demat account, investing in stocks of VMS Industries and other stocks. The assessee purchased 4000 shares of VMS Industries for Rs.149964.65 and sold them at Rs.148327.50, resulting in a loss of Rs. 1637.15. Similarly, in all other transactions, there was some loss, resulting in a total loss from share transactions of Rs.41,438.95 and a loss from F&O of Rs. 36,969. The assessee did not carry forward and set off the losses incurred in these transactions by filing a Return of Income. The Assessing Officer issued a notice under section 148 of the Income Tax Act, 1961, on 29-03-2019, based on information received from the Investigation Wing. Since the assessee had not filed any return of income, a notice under section 142(1) was issued on 07-09-2019. The assessee failed to reply to this notice, resulting in an ex-parte assessment order. The investment in stocks of VMS Industries Ltd. amounting to Rs.1,48,488/- was taxed under section 69 of the Act as unexplained, and tax was demanded thereon.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 1,48,488/- made by AO on account of unexplained investment in Penny Scrip M/s. VMS Industries Limited u/s. 69 of the IT Act?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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