The assessee filed a return declaring income of ₹1.27 crore for AY 2015–16.

The Assessing Officer (AO) passed an order under Section 143(3), making three key additions:

₹3.97 crore: Difference in profit from Futures & Options (F&O) transactions. CIT(A) deleted ₹3.97 Cr, upheld ₹60,088.

₹5.60 crore: Increase in capital, considered unexplained. CIT(A) deleted the entire addition.

₹80.70 lakh: Alleged unexplained investment in shares/securities. CIT(A) found the addition unjustified and deleted it.

The Tribunal upheld the CIT(A)’s reasoning and dismissed the Revenue’s appeal, holding that there was no error in CIT(A)’s order and held that the AO had ignored the reconciliation during remand. The ITAT also held that the CIT(A)’s findings were supported by evidence and consistent capital/investment trail.

The Revenue filed an appeal before Hon’ble Gujarat High Court and the High Court concurred with both CIT(A) and ITAT and found no substantial question of law in the Revenue’s appeal.

The High Court held that the findings were factual and based on documents and proper reconciliation and the AO had failed to address key submissions and misinterpreted data.