IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D”, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.762/Mum/2023 (Assessment year: 2015-16)

DM Sons Metal Pvt Ltd vs DCIT, Central Circle-4(1), Mumbai

502, Peninsula Heights, Juhu 19^th Floor, Air India Building Lane, Andheri (West), Mumbai- Nariman Point, Mumbai-400 021

400058 PAN: AACCD6037D APPELLANT RESPONDENT Assessee by : Shri Prayag Jha Respondent by : Shri. R.R Makwana, Addl.CIT Date of hearing : 27/03/2025 Date of pronouncement : 28/03/2025

O R D E R

Per Anikesh Banerjee (JM):

The instant appeal by the assessee was filed against the order of the Learned Commissioner of Income-tax (Appeals)-52, Mumbai *in short, ‘Ld.CIT(A)+, passed under section 250 of the Income-tax Act, 9161 (in short, ‘the Act’), for A.Y. 2015-16; date of order 16-02-2023. The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax, Central Circle-4(1), Mumbai order passed under section 147, date of order 13/04/2021.

2. The following are the grounds raised by the assessee:-

“1. The Ld CIT(A) erred in not appreciating that the Ld AO had passed the Assessment Order in haste without following the principles of natural justice and the impugned Assessment Order was to be cancelled.

2 The CIT(A) erred in not deleting the disallowance of Rs.1,26,88,604/- out of purchases though the purchases were fully verifiable and the payments were made through bank

3 Without prejudice to Ground No. 2. the Ld CIT(A) erred in sustaining the disallowance of Rs.15,86,075/-being 12.5% of the alleged bogus purchases of Rs.

1.26,88,604/-

4 The Ld CIT(A) erred in enhancing the addition of Rs.2.23,32,905/- to Rs.2,48,14,586/-on account of loss suffered in trading in options.

5. The Ld. CIT(A) erred in upholding the disallowance of loss suffered in option trading without appreciating that the transactions were supported by documentary. evidences and the account was settled through banking channel.

6. The Ld CIT(A) erred in not appreciating that the disallowance of loss was made by the Ld AO relying on third party evidences copies of which were not provided to the assessee thus violating the principles of natural justice.

7 The above grounds of appeal are without prejudice to one another.

8 The appellant craves leave to furnish Additional Evidence which may be relevant to the above Grounds of Appeal in course of the appeal proceedings.

9 The appellant craves leave to amend or alter any of the above Grounds of Appeal or to add new Grounds of Appeal during the course of appeal proceedings.”

2. The assessee's appeal was disposed of by an order dated 31/07/2023. Subsequently, the matter was recalled vide order in M.A. No.62/Mum/2024 dated

30/01/2025 for the limited purpose of adjudicating grounds 4 to 6. The Learned Authorised Representative (Ld. AR) apprised the Bench that the remaining grounds had already been adjudicated in the earlier order dated 31/07/2023. Accordingly, the present hearing is confined to the adjudication of grounds 4 to 6. 3. The Ld. AR, in the course of arguments, submitted that the assessee is engaged in the business of importing and stocking B.Q. plates. A survey was conducted at the assessee’s premises on 18/12/2017, following which the assessee filed its return of income. Subsequently, a notice under Section 148 of the Act was issued and duly served upon the assessee. In response, the assessee filed the same return as originally submitted under Section 139(1) of the Act.

During the assessment proceedings, the Ld. AO observed that the assessee had claimed a trading loss of Rs.2,48,14,586/- in connection with transactions in liquid stock options on the BSE. Relying on the report of the Investigation Wing, Unit-6, Mumbai, the Ld. AO inferred that the assessee had incurred a fictitious loss through coordinated and pre-arranged trading in liquid stock options on the BSE. Consequently, based on the information available, the Ld. AO restrict