Premlata Santosh Kumar Maheshwari vs. Income Tax Officer Ward 19(2)(4), Mumbai

Parties Involved

Facts Summary

The assessee, Premlata Santosh Kumar Maheshwari, filed her return of income on 28.07.2014 declaring total income of ₹38,840/-. Subsequently, information was received from the Deputy Director of Income Tax (Inv.), Unit–6(3), Mumbai, based on an investigation conducted by the Serious Fraud Investigation Office (SFIO) into the affairs of National Spot Exchange Limited (NSEL). The investigation report, shared with the Director General of Income Tax (Investigation), Mumbai, inter alia, dealt with instances of client code modification by certain brokers. As per the information, 219 brokers had carried out 51,565 client code modifications involving purchase and sale transactions aggregating to ₹6,311 crores. It was reported that the purchase and sale transactions were generally executed on the same day and that the brokers were allegedly involved in unauthorised funding against warehouse receipts. The investigation further recorded that no physical delivery of goods had taken place in the trades conducted on the NSEL platform. In the case of the assessee, the Assessing Officer observed that the assessee had undertaken transactions on the NSEL platform during the previous year relevant to AY 2014-15, aggregating to ₹92,06,400/-, which, according to the Assessing Officer, had not been disclosed in the original return of income. On the basis of the aforesaid information, the Assessing Officer formed a belief that income chargeable to tax had escaped assessment to the extent of ₹92,06,4…

Legal Issues

• 1. The Ld.CIT(A)has erred in law and in fact by not appreciating that the Ld.A.O.has Passed an order u/s 147 r.w.s.144B of the Act which is bad in law and illegal.
• 2. The Ld. AO has erred in law and in facts in not appreciating that the notice issued u/s 148 of The Act and the reassessment proceedings conducted u/s 147 of the Act without jurisdiction, bad in law and void ab initio.
• 3. The Ld.CIT(A) has erred in law and in facts in confirming the addition on account Of alleged unexplained commodity transaction through client code modification Of Rs.92,06,400/-u/s.69 r.w.s.115BBE of the Act.

Judgment Outcome

Decided in favour of Assessee.

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