JUDGMENT :

DEEPAK ROSHAN, J.

1. The instant appeal is directed against the judgment dated 22.05.2019, passed by the learned Income Tax Appellate Tribunal (herein after referred as ITAT), SMC Bench, Ranchi in ITA No. 86/Ran/19 preferred by the assessee-respondent; wherein the learned ITAT allowed the appeal of the assessee and reverse the order of CIT appeal who has sustained the addition of income and chargeability of interest passed by the Assessing Officer.

2. Brief fact of the case is that the Assessee is an individual and deriving income from trading of spare-parts of motorcar and mobile phones and filed its return of income declaring total income at Rs. 6,61,080/- electronically on 17.09.2015. The case of the Assessee was selected for scrutiny assessment. In response to notices, the Assessee appeared and produced all books of accounts, papers and documents. In course of assessment proceedings, the Assessee voluntarily surrendered the LTCG for taxation. But the A.O. added the entire receipt from sale of shares amounting to Rs. 10,45,266/- including the cost price/investment made by the Assessee amounting to Rs. 5,40,000/- as unexplained investment u/s 69 of the Act vide its order dated 30.11.2017 passed u/s 143 (3) of the Income Tax Act, 1961.

Against which the Assessee carried the matter before the CIT(A). In the appellate proceeding, the CIT(A) upheld the action of A.O and dismissed the appeal of the Assessee.

Being aggrieved by the order of CIT(A), the Assessee preferred an appeal before the ITAT, SMC Bench Ranchi and the said appeal was allowed vide impugned order dated 22.05.2019 and the AO was directed to delete Rs. 5,40,000/- out of the total addition made under Section 69 of the Act. The learned Tribunal has further directed the AO to delete the addition and charge the interest u/s 234B of the Act on returned income instead of assessed income.

3. The instant appeal was admitted on 03.08.2022 with following questions of law:

(i) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in deleting the addition made by the A.O. on the ground that the income of the past years cannot be taxed as an investment in purchase of shares during the year under consideration?

(ii) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in interpreting the provisions of section 234B(1) read with explanation 1 and 234B(3) of the I.T. Act, 1961 while directing to calculate interest u/s 234B on returned income instead of assessed income?

(iii) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in not taking into account the amendment made in Section 234B and 234C w.e.f. 01.04.2007 and when the said sections have not been declared ultra vires by any Court of law?

(iv) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is justified in following the findings of the Hon’ble Jharkhand High Court in the matter of Ajay Prakash Verma vs. ITO (T.A. No. 38 of 2010) which pertains to A.Y. 2003-04 and is a case prior to the amendment in the I.T. Act, 1961 w.e.f. 01.04.2007?

4. Mr. R.N. Sahay, learned Sr. S.C representing the revenue submitted that so far as first question of law is concerned; the learned ITAT is not justified in deleting the addition made by the assessing officer on the ground that the income of past year cannot taxed as an investment in purchase of shares during the year under consideration. He further relied upon the finding of A.O. that the Securities and Exchange Board of India (SEBI) has in the recent past, passed order on the issue of manipulation of share market for providing accommodation entry of bogus LTCG (Long Term Capital Gain).

Learned counsel also submitted that the script Kailash Auto Finance in which Assessee traded has also been put under surveillance measure by SEBI and due to this reason the A.O committed the entire receipt of sale of share amounting