CCIT (OSD)/Pr. CIT v. Bhupendra Champaklal Delal

Case Laws Analysis
REFERRED CIT v. Reliance Utilities & Power Ltd. 2009 TaxPub(DT) 1275 (Bom-HC)

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The Tax Publishers2024 TaxPub(DT) 1219 (Bom-HC) IN THE BOMBAY HIGH COURT K.R. SHRIRAM & NEELA GOKHALE, JJ. CCIT (OSD)/Pr. CIT v. Bhupendra Champaklal Delal ITA No. 1470 of 2019 6 March, 2024 Appellant by: P.C. Chhotaray. Respondent by: Dinkle Hariya, & Simoni Chouhan. JUDGMENT *Neela Gokhale, J.* 1. Appellant assails judgment and Order dated 9-11-2016 passed by the Income Tax Appellate Tribunal (ITAT) pertaining to assessment year 1988-89. By the said judgment and order, the Income Tax Appellate Tribunal disposed five appeals out of which two were filed by the Revenue relating to assessment year 1988-89 and assessment year 1989-90 and three by Assessee relating to assessment year 1987-88, 1988-89 and 1989-90. The Revenue challenged the impugned order which also relates to assessment year 1987-88 and by our Order dated 21-2-2024, the said appeal being Income Tax Appeal No. 1471 of 2019 is dismissed. 2. Assessee, an individual is a proprietor of M/s. B.C. Devidas engaged in trading in securities and shares. He is also registered as a broker in the Bombay Stock Exchange. He is stated to be a proprietor and Director of M/s. CIFCO Limited and M/s. Food and Inn Ltd. from which company he received salary and commission respectively. 3. Appellant is the Income Tax Department. It is their case that Assessee is a notified person under the Trial of Offences Relating to Transactions in Securities Act, 1992 (TORTS) following his alleged involvement in multicrore securities scam of nineties infamously known as Harshad Mehta Scam. Assessee was investigated by Central Bureau of Investigation, (CBI) followed by a search and seizure action conducted by the Department. 4. The original assessment was completed after the search operation. Assessee preferred an appeal against the assessment order so passed, before the Commissioner (Appeals) (CIT(A)). Both the Department and Assessee aggrieved by order passed by the Commissioner (Appeals) preferred cross-appeals before the Income Tax Appellate Tribunal, which restored all matters to the file of the assessing officer (AO) for de novo assessment after requiring the parties to provide all material. Assessment order was passed de novo by the assessing officer under section 143(3) read with section 254 of the Income Tax Act, 1961 (the IT Act) making certain additions to the income of Assessee. Assessee assailed this order before the Commissioner (Appeals), who partly allowed the appeal, against which appeal was filed before the Income Tax Appellate Tribunal by Assessee. The Income Tax Appellate Tribunal partly allowed the appeal against which the Department has preferred the present appeal. 5. Appellant proposed the following questions of law: 6.1 Whether, on the fact and in the circumstances of the case and in law, the Honble Income Tax Appellate Tribunal was right in deleting the addition made on account of negative brokerage by holding that Tax Authorities have not given proper justification in presuming that the loss shown by the assessee is bogus one and constitutes negative brokerage; without appreciating the fact that the assessee had mixed up all transactions of purchase and sale of shares in 'Patawat sheet' in order to create artificial loss criteria i.e. identity, creditworthiness and genuineness of the transaction? SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1219 (Bom-HC)

IN THE BOMBAY HIGH COURT

K.R. SHRIRAM & NEELA GOKHALE, JJ.

CCIT (OSD)/Pr. CIT v. Bhupendra Champaklal Delal

ITA No. 1470 of 2019

6 March, 2024

Appellant by: P.C. Chhotaray.

Respondent by: Dinkle Hariya, & Simoni Chouhan.

JUDGMENT

Neela Gokhale, J.

1. Appellant assails judgment and Order dated 9-11-2016 passed by the Income Tax Appellate Tribunal (ITAT) pertaining to assessment year 1988-89. By the said judgment and order, the Income Tax Appellate Tribunal disposed five appeals out of which two were filed by the Revenue relating to assessment year 1988-89 and assessment year 1989-90 and three by Assessee relating to assessment year 1987-88, 1988-89 and 1989-90. The Revenue challenged the impugned order which also relates to assessment year 1987-88 and by our Order dated 21-2-2024, the said appeal being Income Tax Appeal No. 1471 of 2019 is dismissed.

2. Assessee, an individual is a proprietor of M/s. B.C. Devidas engaged in trading in securities and shares. He is also registered as a broker in the Bombay Stock Exchange. He is stated to be a proprietor and Director of M/s. CIFCO Limited and M/s. Food and Inn Ltd. from which company he received salary and commission respectively.

3. Appellant is the Income Tax Department. It is their case that Assessee is a notified person under the Trial of Offences Relating to Transactions in Securities Act, 1992 (TORTS) following his alleged involvement in multicrore securities scam of nineties infamously known as Harshad Mehta Scam. Assessee was investigated by Central Bureau of Investigation, (CBI) followed by a search and seizure action conducted by the Department.

4. The original assessment was completed after the search operation. Assessee preferred an appeal against the assessment order so passed, before the Commissioner (Appeals) (CIT(A)). Both the Department and Assessee aggrieved by order passed by the Commissioner (Appeals) preferred cross-appeals before the Income Tax Appellate Tribunal, which restored all matters to the file of the assessing officer (AO) for de novo assessment after requiring the parties to provide all material. Assessment order was passed de novo by the assessing officer under section 143(3) read with section 254 of the Income Tax Act, 1961 (the IT Act) making certain additions to the income of Assessee. Assessee assailed this order before the Commissioner (Appeals), who partly allowed the appeal, against which appeal was filed before the Income Tax Appellate Tribunal by Assessee. The Income Tax Appellate Tribunal partly allowed the appeal against which the Department has preferred the present appeal.

5. Appellant proposed the following questions of law:

6.1 Whether, on the fact and in the circumstances of the case and in law, the Honble Income Tax Appellate Tribunal was right in deleting the addition made on account of negative brokerage by holding that Tax Authorities have not given proper justification in presuming that the loss shown by the assessee is bogus one and constitutes negative brokerage; without appreciating the fact that the assessee had mixed up all transactions of purchase and sale of shares in 'Patawat sheet' in order to create artificial loss criteria i.e. identity, creditworthiness and genuineness of the transaction?