The Income Tax Appellate Tribunal, Mumbai Bench has set aside the addition of nearly Rs.2014 crores to the income of late Harshad Mehta, who was the lynch pin of the stock market scam of the 1990s.
In an order passed on February 14, the Tribunal allowed the appeals contested on behalf of late Harshad Mehta by his wife Jyoti Mehta, and brother Ashwin Mehta.
The subject matter was the order passed by Assessment Officer on March 15, 2016 determining Mehta's income as Rs.2340 crores for the assessment years 1992-93 & 1993-94, in the third round of litigation after earlier orders of remand passed by the ITAT.
The assessment was built on fresh additions and disallowances such as 'money market oversold position' (Rs 1,080.58 crore), 'money market unexplained stock' (Rs 291.05 crore), 'profit on sale of shares in shortage' (Rs 253.16 crore), 'unexplained money' (Rs 251.8 crore), 'interest on securities in money market' (Rs 58.27 crore), 'money market difference received' (Rs 35.55 crore), 'share market trading profit' (Rs 16 crore) etc
Regarding the MMOP(Money Market Oversold Position) it was found that the assessee has explained the details of each of the scripts added by the AO as MMOP.
"We have duly verified all the relevant pages from 1075 to 1082 of additional paper book 4 as well as page 433 of additional paper book and found the contention of the Ld. A R to be correct. The ld DR although relied on the order of the CIT(A) but could not adduce any cogent material or evidence to contradict the evidence filed by the assessee. These evidences clearly prove that these four amounts totaling to Rs.123,05,66,015/- cannot be regarded to be unexplained amount. We, therefore, delete the said addition", observed the Tribunal regarding one of the additions.
The addition of Rs.25,48,16,855/- was deleted finding that it was no unexplained money.
The ITAT the sources of disputed sums were explained.
Mehta, a stock broker, exploited the loopholes in the Ready Forward (RF) Deal and Bank Receipts and manipulated stock markets by issuing fake securities to banks.
The scam was exposed in 1992, leading to registration of around 72 cases against him. He died in 2003, when around 23 cases were pending against him,.
The favorable order could lead to lifting of attachment over properties worth crores belonging to Mehtas.
(Image sourced from here)