DCIT vs Ravi Prakash Aggarwal

Revenue’s Appeal for AY 2015-16 (ITA No.789/Del/2024)

“1.

That on the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of Rs. 2,86,67,946/-, made on account of disallowance of derivative loss claimed by assessee in coordinated and pre-mediated trading on the Bombay Stock Exchange by engaging in reversal trades in illiquid stock options resulting in non-genuine business loss of Rs. 2,86,67,946/-, by relying upon judgments of jurisdictional appellate authority Delhi ITAT Bench in the case of Kundan Rice Mills Ltd. Vs ACIT [2020] and Saarthak Vanija India Pvt. Ltd. Vs DCIT, ITA No. 1473/Del/2022, however the same does not apply in the case of the assessee as the facts of the case are different.

2.

The Ld. CIT(A) erred in by not taking into consideration the other facts of the judgement of Hon’ble Apex Court in the case of Rakhi Trading Co. wherein Apex court upholds the findings of SEBI stating "such impugned transactions are manipulative/deceptive device to create a desired loss and/or profit. Such synchronized trading is violative of transparent norms of trading in securities and also cited nobody intentionally trades for a loss. An intentional trading for loss per se, is not a genuine dealing in securities. Trading is always with the aim to make profits. But if one party consistently makes loss and that too in preplanned and rapid reverse trades, it is not genuine; it is an unfair trade practice." And grossly stated that the Rakhi Trading co. case does not apply in the case of the assessee.”

“9.

The submissions of the appellant regarding Ground Nos. 4 to 11 as well as the re-assessment order passed by the AO have been studied and examined in detailed. The major points highlighted by the AO in the order and the submission made by appellant to those are as under:

The AO has highlighted that the Investigation Unit from Mumbai had passed information to AO marking the trades of the Appellant as category “High Risk” and mentioned that the Appellant is a part of manipulation done with BSE as reversal trades in Illiquid Stock Options.

It is noted from above point that these transactions were marked under the category of “High Risk” and further the Investigation Team had filtered the high loss cases and also taken the statement of Sh. Bharat Bansal of Ashlar Securities Ltd through which the Appellant used to trade in futures and options. Based on statement of Bharat Bansal and the quantum of loss the case was reopened by the AO. The AO was supposed to do further investigation on such High Risk transactions but the AO failed to investigate any further on the transactions done by the AO and without any further conclusive evidence, AO passed an order based on information provided by the Investigation Team and Interim SEBI report.

The Statement recorded of Sh. Bharat Bansal under Section 131 of the Act by the Investigation Department was informed to the AO and the AO has considered the same as evidence.

The Appellant in his submission dated 13th December 2023 has filed addendum wherein the appellant has contested that the Appellant name has not been taken in the statement given by Sh. Bharat Bansal. It has been observed that the Appellant name has not been taken in the said statement submitted by Sh. Bharat Bansal and he has accepted the fact that he used to give Profits and Losses to his clients. It is also noted that he has not accepted that all the transactions which were done by Sh. Bharat Bansal were to give Profits or Losses. Therefore, all transactions of Ashlar Securities cannot be concluded to be crooked or pre-planned in order to result in profit or loss as required by his clients.

In this regard, it is highlighted one of the lines of the statement of Sh. Bharat Bansal which is major evidence in Appellant’s case which is quoted below:

Quote “I purchased some illiquid Futures and Options which are mainly Out of the Money so that nobody else is interested in such items.” Unquote

It is noted that the Appellant’s 98% of the transactions are ITM options or futures and only merely 2% comprise of OTM options. The statement of Sh. Bharat Bansal entirely controverts the Appellant’s transactions in this scenario. Since, the fellow person use to do OTM options and pass on the profit or loss to his clients and the Appellant is doing the ITM options.

It is clearly evident from the above statement that the said fellow Sh Bharat Bansal used to trade in “OUT OF MONEY” transactions and pass on profit or losses to his clients. However, in the reply submitted by the Appellant and transactions which have been added back by the AO are mainly to the tune of 98% “IN THE MONEY” options and not “OUT OF MONEY” options.

This is the main crucial difference between what statement has been given by Sh. Bharat Bansal in respect of nature of such transactions, and since the nature so different from what he has quoted and what the assessee has been doing, the entire case of Appellant has got differentiated from such statement. So, on carefully examining in deep this statement given by the Sh. Bharat Bansal, this statement clearly does not applies to the Appellant scenario and his transactions. Thus, the AO’s approach on this entire case of the Appellant is concluding that the AO has not done any further research or investigation on the details of the case and concluded.

The AO’s order has been gone through and the Appellant has filed an addendum submission dated 13 December 2023 wherein the Appellant has in detailed discussed on every point raised by AO.

The Appellant has contested that the trades executed by the Appellant are in respect of Currency Options and not Stock Options as mentioned in the SEBI report and further investigation done by the department. We have noted the same and gone through the contract notes as well the statements of Ashlar Securities, it is rightly noted that the appellant has executed trades in currency options and not stock options.

Further, the appellant has contested that the Screen based trading does not allowed appellant to know who is the buyer and seller and there is no factual evidence to prove that the Appellant had executed the trade with the seller which was later on reversed by the Appellant which tantamount to Reversal trades in illiquid stock options which has been highlighted by the AO in its order. It is observed that the AO has not further investigated in detail or AO has not produced any material evidence that shows or proves that the appellant was aware about the buyer or seller or there were instances of any identical trades with same buyer or seller by the appellant. Hence, the AO’s argument that the Appellant was aware about the buyer or seller and these trades are reversal trades is without any justification and there is no evidence to establish the same against the Appellant.

Furthermore, the appellant has submitted a recent report by SEBI wherein SEBI has accepted that 9 out of 10 traders are into losses and that the appellant is a regular trader in Bullion, Gold and Options trader wherein the appellant use to incur losses and the current year is not an isolated year wherein the appellant incurred such losses. Since, the appellant’s losses of previous years are not rebutted; it would be also incorrect to rebut the loss of current year.

In addition to above, the appellant has highlighted how the characteristics of the trades of appellant are different from the characteristics of Trades Quoted by the AO which have been discussed as under:

- First difference that we have noted is that the appellant has done options or futures in Currency and not in stocks, hence, the price controlling factor that Appellant could have on stocks is not applicable on the Currency as there is no option to control the price of a particular currency. The currency prices can change anytime and no one can predict the price in order to conclude to transfer profits or loss to any person. Even if the OTM options are selected to trade in Currency options, if the price of particular currency fluctuates negatively, then not necessarily the trader would get the desired profit and loss what he want.

- Secondly, it is well noted that such trades are mostly in OTM options and not ITM options, this point has also been highlighted by the AO that such reversal trades in illiquid stock options were done in OTM transactions. Whereas in the appellant’s case all transactions upto 33.74% are in ITM.

- Thirdly, the AO has contended that the illiquid stock options are always traded for mere few secs, however, the appellant has highlighted many examples wherein the transactions were executed for minutes and there are transactions which lasted for 36 minutes.

- Fourthly, the AO has mentioned that these transactions resulted in loss of 70-100% in the value of premium of such options. The Appellant has alleged this point of AO and mentioned that the loss of the Appellant as compared to the total value of transactions is mere 40.70% of the total value which is Rs. 9.85 crores.

The Trade Volume for the Current Year was of Rs. 9,85,88,834/-, out of which Total Loss that the Appellant has incurred Loss during the Year of Rs. 4,01,28,635, and hence, therefore, it can be concluded that since the Loss % is mere 40.70%, therefore, the Ld. AO’s allegation that 70% to 100% loss in options has been booked by the Appellant is also not applicable to the Appellant.

- Fifthly, the AO has mentioned that the assessee has entered into Identical trades of Buy or Sell in same strike price, however, the appellant has also rebutted this in his submission and showed various examples wherein there is change in Currency as well as there is change in the Strike Price for a particular Option or Futures.

- Lastly, the AO has not highlighted any evidence of connection with the counter-parties that the Appellant had during the screen based trading in order to prove that the appellant was connected to such parties.

Summarily, it can be concluded from the above points that the Appellant’s trades are not identical to the trade’s characteristics that has been quoted by the AO. It is noted that the AO has noted the characteristics of an illiquid trade but has not related such characteristics to the Appellant’s trade. It is very clear that the AO has also not been able to establish the relation between such illiquid stock options with the appellant’s case and the AO majority relied upon the Interim Order of SEBI and statement of Sh. Bharat Bansal which have been also rebutted by the Appellant and in the statement also OTM options are mentioned whereas Appellant options are in ITM.

In view of the above, it is left with only aspect wherein there are few trades wherein the trades lasted for few seconds which have been highlighted by the AO. However, for this point also appellant has filed that the in Options Trading there are two major components i.e.

1.

Decay in Premium: Generally, the options premium starts decaying from time to time as soon as the expiry of the said premium is approaching.

2.

Volatility Index : If the VI is high then the options cannot be holded for a longer period because even if the change in price is less and VI is high the premium value can change more than the actual change in price.

In view of the above, it cannot be established that the options traders who are trading the options for small secs or shorter time are illiquid stock options and done intentionally as mostly options trader are intraday transactions and nobody is trading in options to hold it for a longer period as done in respect of the Investment in delivery of shares. Only because the appellant had executed few trades merely for few seconds, this cannot become the basis to disallow the loss for this reason as other reasons need to be combined and other aspects have to be also seen for disallowing such loss.

Therefore, it is concluded from the appellant’s submission vide Ground Nos. 4 to 11 that the transactions entered by appellant does not have the characteristics.

9.1

In this context, reliance is placed on the order passed by the Delhi ITAT Bench in the case of Kundan Rice Mills Ltd. v. Assistant Commissioner of Income Tax [2020] 120 taxmann.com 422 (Delhi - Trib.)

Quote

“Thus, there were no materials available with the authorities below so as to conclude that assessee has entered into any dubious or other transactions deliberately to show business loss. In such circumstances, it was imperative on the part of the authorities below to examine the issue on merit and to decide whether assessee has suffered genuine business losses out of the transactions/trades in question. However, the authorities below did not examine the issue on merits and merely relying upon the ad-interim order concluded the issue against the assessee. It is also clear from these facts that the ad-interim order which was passed ex parte - Whether would disclose any binding precedent or ratio which may be binding on the Income-tax Department?". In Tribunal view, it would not be binding precedent. It may create some suspicion or doubt. It is well settled Law that "suspicion howsoever strong may be but it cannot take place of legal proof." [Para 14.3]

Unquote  From the order passed by the Delhi ITAT Bench in the case of Kundan Rice Mills Ltd. v. Assistant Commissioner of Income Tax [2020] 120 taxmann.com 422 (Delhi - Trib.), it has been noted that merely relying upon the Interim Order of SEBI cannot be a Conclusive Evidence and can only be treated as “Suspicion or Doubt”.

•

Since, such order of SEBI and the Investigation done by Mumbai Income Tax and the AO order does not bring out any material findings in order to conclude that the Appellant had entered into such illiquid Stock Options, therefore, as mentioned in the Delhi ITAT order above, in the Appellant's case also this merely creates an “Suspicion or Doubt” on the Appellant and it is well settled principle that “Suspicion or Doubt” cannot be treated as Proof or Evidence against the Appellant.

•

In the said order passed by the Delhi ITAT, the case of Rakhi Trading Co. was also pressed discussed in detail and the Delhi ITAT has discussed the judgment of Rakhi Trading (P) Ltd

Quote

“14.4

The Ld. D.R. also relied upon the Judgment of the Hon'ble Supreme Court in the case of Rakhi Trading (P.) Ltd., (supra). In this case the issue was against the Traders and Brokers for violation of Regulation of SEBI Act and relating to synchronized trading in which the penalty was imposed under section 15HA of the SEBI Act against the respondent company which was set aside by the Securities Appellate Tribunal ("SAT") and SEBI has preferred an appeal before the Hon'ble Supreme Court. It is a concurrent Judgment of the Hon'ble Judges of the Hon'ble Supreme Court dated 8-2- 2018. The appeal against the Traders were allowed and Orders of the SAT are set aside and the Order of the SEBI was restored. However, the appeals filed against the Brokers were dismissed. In para 20 of the subsequent concurrent order, the Hon'ble Supreme Court held as under:

"20.

The question whether there was fictitious transactions creating illegal synchronization has to be gathered from the facts and circumstances and intention of the parties. Acting in concert is something about which it is difficult to obtain direct evidence. Proof of manipulation might depend upon inferences drawn from factual details. Such inferences could be gathered from pattern of trading data and the nature of the transactions etc."

14.5

In para 45 the Hon'ble Supreme Court further held as under:

"45.

No grounds have been raised in the show cause notice alleging that the impugned fictitious transactions have been entered into with a view to avoid payment of tax and was an act of tax planning. Adjudicating officer also has not gone into this aspect. Hence, I am not inclined to go into this aspect, whether the impugned transactions were intended to reduce the brunt of taxation and an act of tax planning. The correctness of findings of SAT in the case of Viram Investment (P.) Ltd. is left open."

14.6

The issue in appeal regarding violation of provisions of SEBI Rule was decided based on the facts and circumstances available on record and intention of the parties and ultimately the issue with regard to avoidance of payment of tax and act of tax planning was not adjudicated because the Adjudicating Officer has not gone into this aspect. However, in the present case, the A.O./Ld. CIT(A) have not gone into the facts and material evidence on record and merely referring to the interim USP order of the SEBI and subsequent order have decided the issue against the assessee. Since in the case of Rakhi Trading (P.) Ltd., (supra), the issue under Income-tax Act was also not adjudicated upon, therefore, in our humble opinion the decision in the case of Rakhi Trading (P.) Ltd., (supra), would not support the case of Revenue.

14.7

Considering the totality of the facts and circumstances of the case in the light of material/evidences available on record and in the absence of any investigation carried-out by the authorities below, we are of the view that assessee has been able to establish that assessee company has suffered genuine business loss as had also been suffered in earlier years, therefore, authorities below should not have disallowed the same against the assessee. In view of the above findings, we set aside the Orders of the authorities below and delete the entire addition. In the result,  From the above, it is evident that the order passed by the Apex Court in Rakhi Trading Co. does not covers the issue related to avoidance of payment of tax or tax planning and thus this order is not for the purpose of Income Tax and is for the purpose of SEBI violations by the Brokers or Traders and the violations are in respect of SEBI penalties. Therefore, the order of Rakhi Trading Co. cannot be applied to the Appellant’s issue involved under consideration.

 Further, the order passed by the Rakhi Trading co. does not covers the evidence and proofs that is required for Income Tax Investigation, re-opening of cases under section 147 and their conclusions. Therefore, relying on the Rakhi Trading Co. order passed by the Hon’ble Apex Court to the Appellant case will not be futile and helpful.

 The Order Passed by the Jurisdictional ITAT Delhi in the case of:

Kundan Rice Mills vs. ACIT, [2020] 120 taxmann.com 422 (Delhi - Trib.), pronounced on 9 July 2020.

Saarthak Vanijya India Pvt. Ltd. Vs. DCIT , ITA No. 1473/Del/2022 : Asstt. Year: 2013- 14, Delhi ITAT pronounced on 23 May 2023.

The Above 2 cases directly apply to the facts and circumstances of the case of the Appellant and it is noted that in both the cases the Jurisdictional Delhi ITAT has given relief to the Assessee’s.

Further, in Saarthak Vanijya India case which was pronounced on 23 May 2023, the issue and facts are same of the Appellant as the case relates to same SEBI report which was in Saarthak case and the Appellant case i.e. under Project Falcon.

Since, there are no negative view or adverse view as of now by other courts and based on the investigation done by the AO which merely relies on Interim report by SEBI and the statement of Bharat Bansal of Ashlar Securities, it is convinced that these do not conclude to any material evidence or proofs which can further serve no purpose and shall be ineffectual, and accordingly the Appellant’s grounds are being allowed.

For what has been outlined above and for the reasons stated above, it is held that on the pertaining facts and circumstances of the case, the AO has, thus, fallen into error by inflicting the addition of Rs.3,49,18,784/- being fictitious and bogus losses incurred in trading in Currency Futures while passing the re-assessment order under consideration u/s 147 rws 144B of the Act. The action of the AO is, therefore, disapproved of and the AO is, thus, directed to delete the said addition. Consequently, the Ground Nos. 4to 11 raised by the appellant are allowed.

10.

Ground No. 12 is consequential in nature and doesn’t require any adjudication.

11.

In the result, the appeal of the appellant is partly allowed.”

“On perusal of the trades executed by the assessee, it is seen that its characteristics are same as mentioned in the orders of SEBI with regard to reversal trades. Further, the difference in time of purchase and sale lasts few seconds and not more than an hour. In the instant case, the time difference ranges from few minutes in few instances to few seconds in most instances.

15.

Another significant characteristic of the trades carried out by the assessee is that on the days when the assessee has traded, nobody else has traded in that contract. Thus, the entire volume of trade on the trade day is due to the transaction of the assessee with its counter-party. Such trading is not possible under normal circumstances as there are so many clients trading on the exchange platform at any given moment and under the de-mutualised system, nothing is known about the person on the opposite side unless, there is a prior meeting of minds.

16.

So, in view of the foregoing discussion, it is clear that the trades carried out by the assessee exhibit all the traits of reversal trades which have been declared by the market regulator SEBI and the Hon’ble Apex Court as non-genuine trades and therefore any loss claimed on this account is disallowable.

17.

As discussed above, there is a difference of Rs. 74,53,074/-in the loss claimed by the assessee and the loss calculated by SEBI from trading in stock options on BSE. This is due to the fact that some of the trades are not reversal. The difference in quantity and loss claimed by the assessee from the SEBI data is tabulated as under:

Date Loss As Per Loss As Per Difference In Loss SEBI Assessee 29.10.2014 1925000 1929757 4757 31.10.2014 503350 504058 708 03.11.2014 595000 595254 254 07.11.2014 2100000 2100712 712 10.11.2014 261073 261260 187 11.11.2014 672408 711688 39280 12.11.2014 439575 501721 62146 13.11.2014 740875 816458 7 5583 14.11.2014 1191875 1186210 - 5665 17.11.2014 481600 481713 113 21.11.2014 2392500 2393010 510 24.11.2014 1971225 1971663 438 25.11.2014 649665 650160 495 28.11.2014 585750 855941 270191 02.12.2014 1760500 1902281 141781 04.12.2014 728750 3923229 3194479 08.12.2014 3845838 4492077 646239 09.12.2014 4331000 5808314 1477314 11.12.2014 4360625 4368418 7793 12.12.2014 1512875 1513186 311 15.12.2014 3376650 3377303 653 16.12.2014 492650 2027445 1534795 Total 34918784 42371858 7453074

17.1.

Upon analysis of the trades of the assessee as per the BSE master data, it is seen that some trades are non reversal trades and majority trades are reversal trades which are those trades in which an entity reverses its buy or sell positions in a contract with subsequent sell or buy positions with the same counterparty during the day.

18.

Role of Brokers:

18.1

Such synchronised trading is not possible unless there is prior meeting of minds and without the connivance of brokers. SEBI also passed an ad-interim ex-parte order dated 17.02.2016 against 22 stock brokers through whom the 59 entities had traded in the BSE Stock Options Segment restraining them from buying, selling or dealing in the securities markets, either directly or indirectly, in any manner, except as a stock broker for their existing clients in the cash segment.

18.2.

The whole time member, SEBI in his concluding remarks against the brokers has held as under:

“23.

The magnitude in which these stock brokers have facilitated the trading to their clients and the facts and circumstances in the instant matter prima-facie suggest that it is not only a matter of negligence on the part of stock brokers but also of their connivance to be a part of the scheme to facilitate their clients to make loss or profit as per their desire. By the sheer number of reversal instances at each Trading Member level, I am also not willing to accept that thousands of trades entered by trading members ended up becoming reversal trades 'by chance' or because of the 'illiquid nature of the contract'.

24.

In my view, the acts of the stock brokers to facilitate the loss-making entities and the profit–making entities discussed hereinabove prima-facie show a scheme, plan, device and artifice on their part for some ulterior motive. These brokers have, primafacie , facilitated their clients to use and employ a pre-meditated manipulative device or contrivance while dealing in securities market and indulged in non-genuine and deceptive transactions. The act of the stock broker to be part of the scheme by facilitating execution of non-genuine and deceptive transactions for their clients is, prima-facie, covered under the definition of 'fraud' and their dealings as discussed herein above are „fraudulent’ as defined under regulation 2(1)(c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”) and prohibited under the provisions of section 12A(a), (b) and (c) of the SEBI Act, 1992 and regulations 3(a), (b), (c) and (d) and 4(1) and 4(2)(a) thereof.”

19.

In the case of Rakhi Trading Private Limited delivered on 08.02.2018 in CA No. 1969 of 2011, the Hon’ble Apex Court Has held that “Nobody intentionally trades for a loss. An intentional trading for loss per se, is not a genuine dealing in securities. Trading is always with the aim to make profits. But if one party consistently makes loss and that too in preplanned and rapid reverse trades, it is not genuine; it is an unfair trade practice.”

20.

It is therefore clear from the above discussion that the losses incurred by the assessee in A.Y. 2015-16 were deliberately incurred in order to avoid tax as the assessee was having positive income in this assessment year.

21.

The orders of the market regulator SEBI on reversal trades declaring them as nongenuine, the order of SEBI against the brokers on their role in facilitating reversal trades, similarities in the trades of the assessee and reversal trades and finally the order of the Hon’ble Supreme Court in the case of Rakhi Trading stamping reversal trades as non-genuine trades leave no room for any doubt that the losses incurred by the assessee are non-genuine.

22.

The assessee was issued show cause notice on 26.03.2022. In response to this notice, the assessee gave his submission on 29.03.2022 and in this regard video conferencing was also held on 30.03.2022, wherein, the assessee explained the submission made by him. The submissions given by the assessee have been perused. Here, assessee has again objected to reopening of his case. Further, assessee has mentioned that he was doing business with broker M/s Ashlar Securities Pvt. Ltd. which is a member of NSE having routine dealing in commodities. Assessee has entered into transactions with this broker in normal course of business. Assessee’s reply has been perused and is untenable for reasons already given in above paras. All the objections raised by assessee in his last submission have already been disposed earlier. Further, with respect to transaction being non-genuine it has already been elaborated that the transactions done by the assessee meet the characteristics of reversal trades as identified by SEBI.

23.

So, in view of the above discussion, proposed to be made to disallow the loss of Rs. 3,49,18,784/-from trading in stock options and to re-compute the total income of the assessee for the A.Y. 2015-16, after disallowing such loss.”

CO NO.251/Del/2025 (in ITA No.789/Del/2024)

Revenue’s Appeal for AY 2017-18 (ITA No.785/Del/2024)

“1.

That on the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of Rs. 6,24,00,000/- made during the assessment proceedings u/s.143(3) of I.T. Act on account of cash deposit during the period 09.11.2016 to 31.12.2016 which were claimed by the assessee that the sale proceeds out of the purchases made amounting to Rs. 2,41,13,823/- from M/s Krishna Overseas and Rs. 3,73,72,059/-from RVJ Overseas Pvt Ltd.

2.

That on the facts and in the circumstances of the case, the Ld.CIT(A) erred in relying upon the decision of jurisdictional High Court in the case of Principal Commissioner of Income-tax v. Agson Global (P.) Ltd. however the same does not apply in this case as the facts of the case are different. Moreover, Ld. CIT(A) erred in by not taking into consideration the view of the AO that assessee has not made any payment of the alleged purchases made, during the period under consideration, from the M/s Krishna Overseas and RVJ Overseas Pvt Ltd. However, rather making payments, assessee has been receiving payments from the sellers i.e. M/s Krishna Overseas and RVJ Overseas Pvt Ltd. and this non-genuine purchases from these entities could not be substantiated by the assessee by producing any evidence such as purchase bills and bank statement corroborating the claim of the assessee.”

“In the above case also, the ITAT has highlighted that since the VAT department has accepted the sale and purchase, both cannot be refuted in Income Tax. Also, the ITAT has mentioned that merely on the basis of conjectures and surmises the decision cannot be drawn against the appellant. The AO should not act in arbitrary manner.

In light of above decisions, and the decisions quoted by the Appellant, also the Jurisdictional High Courts and Jurisdictional ITAT decisions who have already given reliefs to the assessee’s in the case of demonetization and the Appellant has submitted all the supporting annexures in respect of the same, therefore, in light of those decisions it has been considered to allow the grounds 2 to 8 in the favor of the appellant.

In view of above submission, the appellant has duly substantiated the cash sales made during the demonetization period were genuine and the AO is unable to pin-point any defect in any document or information provided. The AO is neither able to prove his view point with any material on record nor is he able to disprove the facts laid down on record by the assessee, therefore, making addition merely on the basis of suspicions is not justified. For what has been outlined above and for the reasons stated above, it is held that on the pertaining facts and circumstances of the case, the AO has, thus, fallen into error by inflicting the addition of Rs.6,24,00,000/- while passing the assessment order under consideration. The action of the AO is, therefore, disapproved of and the AO is, thus, directed to delete the said addition. Consequently, the Ground Nos. 2 to 8 raised by the appellant are allowed.”

CO NO.252/Del/2025 (in ITA No.785/Del/2024)