DCIT, BHILWARA V. Shri Harsh Kumar Mansinghka, BHILWARA

ITA 600/JODH/2013

• Counselvise Citation: 60023314 RSA 2013
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN
• Keywords: Business income; Business expenditure; Salary income; Audit objection; Earning of tax free income; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.600/JODH/2013 (A.Y. 2009-10) DCIT, CIRCLE, VS. SHRI HAR SH KUMAR MANSINGHKA, BHILWARA. PUSA NIWAS, NEAR KASHIPURI, BHILWARA (RAJASTHAN). PAN NO. ADFPM 6099 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN & SHRI RAJENDRA JAIN. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 01/04/2014. DATE OF PRONOUNCEMENT : 10/06/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 09/10/2013 OF LD. CIT(A), AJMER. THE FOLLOWING GRO UNDS HAVE BEEN RAISED IN THIS APPEAL: THE LD. CIT(A), AJMER IN THE PRESENT FACTS RELATIN G TO THIS ISSUE, IN BRIEF, ARE THAT AND CIRCUMSTANCES OF THE CASE HAS ERRED IN:- 1. NOT SUSTAINING THE REOPENING U/S 148 OF THE I.T. ACT, WITHOUT APPRECIATING THE FACTS OF THE CASE. 2 2. DELETING THE ADDITION OF RS. 1,15,26,497/- MADE BY THE AO, TREATING THE INCOME FROM CAPITAL GAIN (STT) U/S 10(38) OF TH E I.T. ACT, AS INCOME FROM OTHER SOURCES, WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELET E OR MODIFY THE ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE GR IEVANCE OF THE DEPARTMENT RELATES TO THE ACTION OF THE LD. CIT(A) IN QUASHING THE REASSESSMENT FRAMED BY THE ASSESSING OFFICER AFTER REOPENING UNDER SECTION 148 OF THE I.T. ACT, 1961 (HEREINAFTER REFE RRED TO AS THE ACT IN SHORT) . 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31/07/2009 DECLARING AN INCOME OF RS. 52, 27,480/-. THE ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT ON 08/11/2010. THEREAFTER, THE ASSESSING OFFICER ISSU ED NOTICE UNDER SECTION 148 OF THE ACT ON 21/10/2011 AFTER RECORDIN G THE REASONS THAT AS PER FORM NO. 10DB OF THE ACT, THE ASSESSEE HAD SOLD THE EQUITY SHARES OF RS. 2,43,698/- ON WHICH SECURITY TRANSACTION TAX (S TT) HAD BEEN PAID WHILE THE ASSESSEE HAD CLAIMED LONG TERM CAPITAL GA INS OF RS. 1,17,70,195/- WERE NOT COVERED BY STT AND EXEMPTION FOR THE SAME WAS NOT ALLOWABLE, THIS HAS RESULTED INTO UNDER COMPUTA TION OF LONG TERM 3 CAPITAL GAINS OF RS. 1,15,26,497/- WITH THE TAX EFF ECT OF RS. 15,67,142/-. THE ASSESSEE OBJECTED TO REOPENIN G UNDER SECTION 148 OF THE ACT AND EXPLAINED THAT THE SALE TRANSACTIONS OF THE EQUITY SHARES ALONGWITH STT PAYMENTS WERE DULY VERIFIED BY THE AS SESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND EXEM PTION WAS ALLOWED. THE ASSESSING OFFICER DISPOSED OFF THE ASSESSEES O BJECTION BY OBSERVING THAT THE FORM NO. 10DB REVEALED THAT THE SALE OF EQ UITY SHARES WAS OF RS. 2,43,698/- ON WHICH STT COLLECTED WAS OF RS. 304.63 ONLY WHEREAS THE ASSESSEE HAD CLAIMED LONG TERM CAPITAL GAIN OF RS. 1,17,70,195/- MEANING THEREBY THAT GAINS OF THE SALE OF SHARES WERE MORE THAN THE TOTAL SALE AMOUNT. THE ASSESSING OFFICER CONCLUDED THAT THE GA INS OF RS. 1,15,26,497/- (RS. 1,17,70,195/- (-) RS. 2,43,6 98/-) WERE NOT COVERED WITH THE STT AND EXEMPTION WAS NOT ALLOWABLE FOR TH E SAME. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE POINTED OUT THAT SUBMISSION OF FORM NO. 10DB WAS NO T REQUIRED UNDER THE LAW, BUT IT WAS AVAILABLE ON THE RECORD AS AN DOCUM ENTARY EVIDENCE AND THE TRANSACTION OF SHARES WAS ALSO VERIFIED AND THA T THE ASSESSEES SIGNATURE WAS AVAILABLE. HOWEVER, THE ASSESSING OF FICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND MADE T HE ADDITION OF RS. 1,15,26,497/- BY OBSERVING AS UNDER:- 4 'LOOKING TO THE ABOVE FACTS AND IT PROVES FROM RECO RD, EVIDENCE ON RECORD THAT SALE OF EQUITY SHARES IN A COMPANY VALUE OF TR ANSACTION ENTERED INTO DURING THE F.Y. WAS RS. 2,43,698/- ON WHICH STT COL LECTED RS. 304.63 ONLY. WHEREAS ASSESSEE HAS CLAIMED LTCG RS. 1,17,70,195/ - MEANS GAIN OF SALE OF SHARE IS MORE THAN THE TOTAL SALE AMOUNT. IT P ROVES THAT THE GAIN OF RS. 15,26,497/- (1,17,70,195 - 2,43,698) WAS NOT COVERED WITH SECURITY TRANSACTION TAX & EXEMPTION WAS NOT ALLOWA BLE AND SHOULD BE TAXED AS NORMAL LTCG. AS DISCUSSED ABOVE IT IS PROVED THAT ASSESSEE HAS E SCAPED INCOME OF RS. 1,15,26,497/- WHICH ASSESSEE HAS EARNED IN THE NORM AL BUSINESS ACTIVITY OF SHARES TRADING DURING THE YEAR AND THE ASSESSEE HAS GIVEN IT COLOUR OF INCOME AS EXEMPTED U/S 10(38), HOWEVER IT IS NOT EX EMPTED U/S 10(38) OF THE I.T. ACT, 1961 THIS INCOME ESCAPED TO THE ASSESSMEN T OF INCOME FOR THE A.Y. 2009-10. THE ASSESSEE'S CLAIM OF RS. 1,15,26,497/- INCOME CA PITAL GAIN (STT) U/S 10(38) IS NOT ALLOWED AND THIS DECLARED INCOME IS T REATED INCOME INCURRED FROM OTHER SOURCES. ON THIS INCOME THE INCOME TAX I S TO BE CHARGED AS PER THE PROVISION OF THE I.T. ACT, 1961. ' 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER:- 1. THE INCOME OF THE ASSESSEE IS FROM SALARY, LON G TERM CAPITAL GAIN, AND INTEREST ONLY. THIS IS EVIDENT FROM THE ASSESSMENT ORDER PASSED U/S 143(3). 2. THE ASSESSEE RECEIVED NOTICE U/S 148 DATED 21/10/2011 FROM DY. COMMISSIONER OF INCOME TAX, BHILWARA AND THE SA ME WAS COMPLIED ON 11/11/2011. 3. ON ASKING THE REASON FOR ISSUING THE NOTICE U/S 148 THE A.O. PROVIDED THE COPY OF REASON IN WHICH IT IS MENTIONED THAT AS SESSEE HAS CLAIMED AND WAS ALLOWED EXEMPTION U/S 10(38) OF RS. 1,17,70,195 /- AS LONG TERM CAPITAL GAIN. ON SCRUTINY REVEALED THAT AS PER FORM 10DB (R ULE 20AB) EVIDENCE OF PAYMENT OF SECURITY TRANSACTION TAX CODE OF TRAN SACTION NO.2 I.E. SALE OF EQUITY SHARES IN A COMPANY VALUE OF TRANSACTION ENTERED IN TO DURING 5 THE FINANCIAL YEAR WAS RS. 2,43,698/- ON WHICH STT COLLECTED RS. 304.63 ONLY. WHEREAS ASSESSEE HAS CLAIMED LTCG RS. 1,17,7 0,195/- MEANS GAIN OF SALE OF SHARE IS MORE THAN TOTAL SALE AMOUNT. IT PR OVES THAT THE GAIN OF RS. 1,15,26,497/- (1,17,70,195/- - 2,43,698/-) WAS NOT COVERED WITH SECURITY TRANSACTION TAX AND EXEMPTION WAS NOT ALLOWABLE AND SHOULD BE TAXED AS NORMAL LTCG. THEREFORE THE A.O. BELIEVED THAT INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2009 -10 TO THE TUNE OF RS. 1,15,26,497/-. 4. THE ASSESSEE OBJECTED FOR ISSUING THE NOTICE U/S 148 AS PER LETTER 12/01/2012 . 5. THE A.O. VIDE LETTER DATED 15/02/2012 STATED THA T THE NOTICE U/S 148 ISSUED IS CORRECT AND VALID, WHILE OBSERVING THAT I N THE FORM 10DB ACTION POINT IS AS UNDER: THIS FORM IS RELEVANT ONLY FOR THE ASSESSEE WHOSE T OTAL INCOME IN A PREVIOUS YEAR INCLUDES ANY BUSINESS INCOME ARISING FROM TAXA BLE SECURITIES TRANSACTION AND WHO HAS PAID SECURITIES TRANSACTION TAX IN ACCORDANCE CHAPTER-VII OF FINANCE (NO. 2) ACT, 2004. THE ASSES SEE HAS EARNED INCOME/GAIN FROM DOING THE BUSINESS/ TRADING OF SHA RES/SCRIPTS ETC. AND IN THE RETURN OF INCOME HE HAS SHOWN LONG TERM CAPITAL GAIN AS DECLARED EXEMPT U/S 10(38) OF THE IT ACT, 1961. 1. YOUR HONOUR WILL APPRECIATE THAT THE REQUIREMENT OF FORM NO.10DB WAS AS PER RULE 20AB AS THE SECTION AND RULES WERE APPLICA BLE UP TO ASSESSMENT YEAR 2008-09 ONLY. THEREFORE THE RULES AND SECTION IS NO T APPLICABLE FOR THE ASSESSMENT YEAR 2009-10 WHICH IS UNDER APPEAL. AND THE RULE 20AB WAS APPLICABLE FOR FIRST PROVISO OF SEC.88E AND SECTION 88E IS IN RESPECT OF INCOME CHARGEABLE UNDER THE HEAD P ROFIT AND GAIN OF BUSINESS OR PROFESSION NOT FOR ANY OTHER SOURCE OF INCOME I. E. CAPITAL GAIN. THUS IT IS CLEAR THAT THIS SECTION AND RULE HAS BEC OME INOPERATIVE FROM THE ASSESSMENT YEAR BEGINNING FROM THE 1 ST DAY OF APRIL, 2009 I.E. FROM ASSESSMENT YEAR 2009-10 WHICH IS ALSO WRITTEN IN TH E FOOT NOTE OF THE ACT 'NO REBATE IS ADMISSIBLE UNDER SEC. 88E FROM THE ASSESS MENT YEAR 2009-10 ONWARDS.' 6 THEREFORE ACCORDING TO A.O. HIMSELF THE FORM NO.10D B WAS NOT APPLICABLE DURING THIS YEAR AS THIS FORM WAS NOT APPLICABLE TH EREFORE THE THEN A.O. NOT TAKEN ON RECORD THIS FORM BUT VERIFIED THE PAYMENT OF SECURITIES TRANSACTION TAX WITH OTHER EVIDENCES AND THE SAME WERE TAKEN ON RECORD. THUS IT IS CLEAR THAT STATUTORY PROVISIONS ARE VERY CLEAR AND DO NOT PERMIT ANY AMBIGUITY. IT IS WELL SETTLED LAW AS REPORTED IN (2012) 18 TAX MANN.COM 79(DELHI) IN THE CASE OF CIT VS. RAJKUMAR MAHAJAN THAT LEGALLY ERRON EOUS OPINION OF A.O. NOT BE GROUND OF INITIATION OF REASSESSMENT PROCEEDING. - 321 ITR 519 (BOM.) BALAKRISHANA H. WANI V/S ITO . 2. AS FORM NO.10DB UNDER RULE 20AB AND SECTION 88E WAS NOT APPLICABLE FOR THE ASSESSEE HENCE HE HAS NOT ASKED TO SUBMIT F ORM NO.LODB DURING THE COURSE OF ASSESSMENT BUT TO VERIFY THE PAYMENT OF SECURITIES TRANSACTION TAX HE ASKED FOR SUBMISSION OF THE COMPLETE DETAILS LIKE NATURE AND SOURCE OF EXEMPTED CAPITAL GAIN INCOME RECEIVED AT RS. 1,1 7,70,195/- ALONGWITH PROOF OF SHARE OF LISTED EQUITY SHARES ON STOCK EXCHANGE WITH PAYMENT OF SECURITIES TRANSACTION TAX FOR VERIFICATION AS CLAIMED EXEMPTE D U/S 10(38) VIDE A.O. QUERY LETTER DATED 21/09/2010, THE DETAILS AND DOCU MENTS WERE SUBMITTED AND THE AO VERIFIED THE SAME, WHICH IS EVIDENT FROM THE ASSESSMENT ORDER. THE A.O. AT PAGE 2 IN PARA NO. 3 OF THE ORIGINAL AS SESSMENT ORDER STATED THAT THE ASSESSEE HAS DECLARED SALARY INCOME, NET LONG T ERM CAPITAL GAIN INCOME ON SALE OF EQUITY SHARES OF VARIOUS COMPANIES AT RS .1,17,70,195/- IN THIS ASSESSMENT YEAR. DURING THE COURSE OF ASSESSMENT PR ECEDING THE A.R. OF THE ASSESSEE HAD FILLED COMPLETE DETAILS/ CHART OF LONG -TERM CAPITAL GAIN EARNED BY THE ASSESSEE ON THE SALE OF EQUITY SHARES. THE A SSESSEE HAS ALSO FILLED DETAILS OF SHARE PURCHASED AND SHARES SOLD OF LISTE D COMPANIES DURING THIS ASSESSMENT YEAR AND HAVE PAID SECURITY TRANSACTION TAX ON SUCH SALE OF LISTED SHARES. THEREFORE IT IS CLEAR THAT COMPLETE PAYMENT OF STT ON SALE OF SHARES HAS BEEN VERIFIED AND AFTER VERIFICATION SOME OF THE CO PIES OF SALE VOUCHER ON WHICH STT WAS CHARGED AND COPY OF LEDGER ACCOUNT OF STT PAYMENT WERE TAKEN BY THE ASSESSING OFFICER ON RECORD DURING THE ORIGINAL ASSESSMENT PROCEEDING ON THIS FACT ALSO ISSUE OF NOTICE U/S 14 8 WAS INVALID. 7 THE DEPARTMENT IMPLIEDLY ACCEPTED THE GENUINENESS O F THE TRANSACTION AS IS EVIDENT THE ASSESSMENT ORDER ITSELF PASSED U/S 143( 3) NO REASSESSMENT PROCEEDING CAN BE MADE. - CIT V/S SMT. SAROJ AGARWAL 213 TAXMAN 97 (ALL.) IN THE CASE OF CIT-VI-NEW DELHI V/S USHA INTERNATIO NAL LTD., THE HON'BLE DELHI HIGH COURT HAS HELD WHETHER REASSESSMENT PROC EEDINGS WILL BE INVALID IN CASE ASSESSMENT ORDER ITSELF RECORDS THA T ISSUE WAS RAISED AND IS DECIDED IN FAVOUR OF ASSESSEE, REASSESSMENT PROCEED ING IN SAID CASES WILL BE HIT BY PRINCIPLE OF' CHANGE OF OPINION -YES. 3. AS PER ASSESSMENT ORDER MADE U/S 147/143(3) WE F IND THAT AUDIT PARTY BELIEVED ONLY ON FORM NO. 10DB IN THEIR POSSE SSION IN WHICH IN CODE NO. 02 OF CODE OF TRANSACTION IN SERIAL NO.2 OF TH E FORM 'VALUE OF SALE TRANSACTION' RS. 2,43,698/- WERE WRITTEN AND IN COD E NO. 1 'PURCHASE VALUE OF SHARE' RS. 1,60,43,786/- WAS WRITTEN. ONL Y ON THIS BASIS NOTICE U/S 148 WAS ISSUED. THE PRESENT A.O. ON 21/07/2011 DEMANDED THE FORM NO .10DB FOR THE BEST REASON KNOWN TO HIM, THOUGH THIS FORM WAS NOT RELEV ANT AS THE SAME IS NOT IN THE INCOME TAX ACT/RULE FOR THIS ASSESSMENT YEAR EV EN THOUGH THE ASSESSEE VIDE LETTER DATED 21/07/2011 SUBMITTED THE SAME TO HIM IN WHICH IN CODE NO.2 THE AMOUNT OF SALE IS RS.1,60,43,786/- ON WHIC H STT OF RS. 20,054/- WAS MENTIONED AND IN CODE NO.1 THE AMOUNT OF PURCHA SES OF RS. 2,43,698/- AND STT OF RS. 304.63 WAS MENTIONED IN FORM NO. 10D B. THUS IT WAS VERY MUCH CLEAR THAT IN THE FORM 10DB W HICH WAS RELIED BY THE AO ON THE BASIS OF THE AUDIT PARTY, ITS SEEMS THAT DUE TO SOME CLERICAL MISTAKE THE AMOUNT OF THE CODE NO. 1 WAS WRONGLY WR ITTEN IN CODE NO. 2 AND VISE-VERSA. THIS CAN ONLY BE DESCRIBED AS HUMAN ERRORS WHICH WE ARE ALL PROVE TO MAKE. THE AO ONLY BELIEVE ON THE PAPERS (W E DO NOT KNOW FROM WHERE AUDIT PARTY HAVE TAKEN) OF AUDIT PARTY WITHOU T AGAIN VERIFYING THE CORRECTNESS FROM THE DOCUMENTS SUBMITTED BY THE ASS ESSEE AT THE TIME OF ORIGINAL ASSESSMENT AND THE FORM NO. 10DB SUBMITTED ON 21/07/2011. 8 THEREFORE IT IS VERY MUCH CLEAR THAT THE A.O. HAS N OT APPLIED HIS OWN MIND AND BELIEVED ONLY ON THE AUDIT PARTY AND THEREFORE CHANGED HIS OPINION. YOUR HONOUR WILL APPRECIATE THAT ON THESE GROUND ON LY RE-ASSESSMENT PROCEEDING CANNOT BE TAKEN BY THE A.O. MOREOVER NO ASSESSMENT IN RESPECT OF SAID HEAD WHICH FORMED REASON TO BELIEVE IN NOTI CE WAS MADE THE SOLE REASON OF RE-OPENING OF ASSESSMENT FAILS. PLEASE PERMIT US TO QUOTE THE FOLLOWING JUDGMENT IN REFERENCE OF ABOVE ALL AUDIT PARTY CANNOT PRONOUNCE THE LAW AND THEIR INFO RMATION ON THE ISSUE CANNOT BE MADE A GROUND FOR RE-OPENING THE ASSESSME NT. CADIA HEALTH CARE LTD., V/S ACIT (2012) 65 DTR385 ( GUJ.) CITV/S SHRI RAJASTHAN SYNTEX LTD., 212 TAXATION 275 (RAJ.) ACIT V/S M.KEXIM (INDIA) LTD., 47 TAXWORLD 206. WESTERN INDIA BAKERS (P) LTD., V/S DY.CIT87ITD 607. CIT V/S KAMDHENU STEEL & ALLOYS IND. LTD., 248 CTR 33. GMR HOLDING (P) LTD., V/S DCIT (2012) (BANG.TRI) CARITON OVERSEAS PVT.LTD., V/S ITO 318 ITR 295 (DEL .) WHEN QUERY SPECIALLY RAISED IN THE ORIGINAL ASSESSM ENT PROCEEDING AND ON RECEIVING EXPLANATION FROM THE ASSESSEE AND THE CLA IM WAS ALLOWED SUBSEQUENT CHANGE OF OPINION IS NOT GROUND FOR RE-A SSESSMENT. SANAND PROPERTIES PVT.LTD., V/S JT.CIT 15 TAXMAN 6 8. YASRAJ FILM (P) LTD., V/S ACIT 332 ITR 428 (BOM.) ASSTT. CIT V/S ROLTA INDIA LTD., 132 ITD 98 CIT V/S SMT. SAROJ AGARWAL 213 TAXMAN 97 CIT VI NEW DELHI V/S USHA INTERNATIONAL LTD., METAL ALLOYS CORPN. V/S ACIT (GUJ.) 214 TAXMAN 83. CALCUTTA DISCOUNT CO.LTD, 419ITR 191 (SC) RRB CONSULTANTS & ENGINEERS (P) V/S DY.CIT208 TAXMA N 133. CIT V/S MANAK SHOES CO. PVT.LTD.,200 TAXMAN 133 (DE I.) MOREOVER IT HAS BEEN HELD IN CIT VS. BHANJI LAVJI ( 1971) 79 ITR 582 (SC) THAT WHEN THE PRIMARY FACTS NECESSARY FOR ASSESSMENT ARE FULLY AND TRULY DISCLOSED, THE ITO WILL NOT BE ENTITLED ON CHANGE OF OPINION T O COMMENCE PROCEEDINGS FOR REASSESSMENT. SAME VIEW HAS BEEN CONFIRMED BY T HE HON'BLE SUPREME 9 COURT IN THE CASE OF CIT V/S KELVINATOR OF INDIA LT D., AS REPORTED IN 320 ITR 561. SIMILARLY, IF HE HAS RAISED A WRONG LEGAL INFERENCE FROM THE FACTS DISCLOSED, HE WILL NOT, ON THAT ACCOUNT, BE COMPETENT TO COMMENCE REASSESSMENT PROCEEDINGS. SIMILAR VIEW WAS TAKEN IN ITO VS. NAWA B MIR BARKAT ALI KHAN BAHADUR (1974) 97 ITR 239 (SC) WHERE THE HON'BLE AP EX COURT HELD THAT HAVING SECOND THOUGHTS ON THE SAME MATERIAL, AND OM ISSION TO DRAW THE CORRECT LEGAL PRESUMPTION DURING ORIGINAL ASSESSMEN T DO NOT WARRANT THE INITIATION OF A PROCEEDING U/S 147. IN VIEW OF ABOVE ALL WE REQUEST YOU TO KINDLY ALLOW THE APPEAL AND OBLIGE. FURTHER MORE DETAIL/SUBMISSION IF REQUIRED WILL BE SUBMITTED IN DUE COURSE. 5 . THE ASSESSEE FURTHER SUBMITTED TO THE LD. CIT(A) AS UNDER:- 1. 'THAT ON THE ORIGINAL RETURN OF INCOME THE ASSESSEE CLAIMED EXEMPTION U/S 10(38) IN RESPECT OF LONG TERM CAPITAL GAIN. TH E COPY OF RETURN OF INCOME ALONGWITH COMPUTATION OF INCOME IS ENCLOSED FOR YOUR READY REFERENCE PLEASE. 2. ON MERIT ALSO WE SUBMIT THAT - THE AO VIDE LETTER DATED 21.9.2010 ASKED THE ASSES SEE TO GIVE COMPLETE DETAIL LIKE NATURE AND SOURCE OF EXEMPT CA PITAL GAIN INCOME RECEIVED OF RS. 1,17,70,195/- IN THE ASSESSMENT YEA R PROOF OF SALE OF LISTED EQUITY SHARES ON STOCK EXCHANGE WITH PAYMENT OF SECURITY TRANSACTION TAX SHOULD BE PRODUCED FOR VERIFICATION FOR CLAIM EXEMPT INCOME U/S 10(38) COPY OF LETTER GIVEN BY AO ENCLOS ED. THE ASSESSEE VIDE LETTER DATED 8.11.2010 (THE REFE RENCE OF THIS DATE IS ALSO MENTIONED BY THE AO IN THE ASSESSMENT ORDER) S UBMITTED THAT THESE DETAILS HAS ALREADY BEEN SUBMITTED AND VERIFI ED BY YOUR HONOUR. COPY OF LETTER ALONGITH DETAILS AS SUBMITTED TO THE AO ENCLOSED FOR YOUR READY REFERENCE PLEASE. THUS IT IS EVIDENT THAT FOR THE EXEMPTED CAPITAL GAIN SPECIFIC QUERY WAS RAISED BY THE AO AND AFTER COMPLETE VERIFICATION AND SATISFACTION THE CLAIM WAS ALLOWED BY HIM IN TH E ASSESSMENT ORDER PASSED U/S 143(3). ' THE ASSESSEE HAS SUBMITTED AS UNDER: 'AS ALREADY SUBMITTED THAT THE ORIGINAL ASSESSMENT U/S 143(3) WAS PASSED AFTER CONSIDERING THE COMPLETE DETAILS/DOCUM ENTS IN RESPECT OF LONG TERM CAPITAL GAIN BY THE A.O. IT IS WELL SETTL ED LAW THAT IF A DOCUMENT OR TRANSACTION IS GENUINE, THE A.O. CAN'T GO BEHIND IT TO SOME SUPPOSED UNDER LINE SUBSTANCE AND HAS TO LOOK AT THE ENTIRE 10 TRANSACTION AS A WHOLE AND NOT TO ADOPT A DISSECTIN G APPROACH. FURTHERMORE THE DEPARTMENTAL AUTHORITIES SHOULD REL Y ONLY ON LEGAL AND ADMISSIBLE EVIDENCE MEANING THERE OF THE EVIDEN CE ON WHICH A JUDICIAL MIND CAN ACT. YOUR HONOUR WILL APPRECIATE THAT THE ACTION U/S 147/148 WAS TAKEN ONLY ON THE OBJECTION RAISED BY T HE AUDIT PARTY AND THAT TOO ON THE FORM WHICH IS NOT RELEVANT. AS PER THE HON'BLE GUJRAT HIGH COURT DECISION IN T HE CASE OF VIJAY RAMESH BHAI GUPTA V/S ACIT IT IS HELD THAT THE A.O. PASSED ASSESSMENT ORDER U/S 143(3) IN WHICH HE ALLOWED THE ASSESSEE'S CLAIM FOR BUSINESS EXPENSES. THE REVENUE AUDIT RAISED AN OBJECTION THA T AS THE ASSESSEE'S BUSINESS HAD CEASED, THE INCOME HAD TO A SSESSED AS 'OTHER SOURCES' AND THE EXPENDITURE DISALLOWED. THE AO REP LIED TO THE AUDIT STATING THAT THE OBJECTION WAS NOT CORRECT AND THAT THE ASSESSMENT ORDER WAS CORRECT. THE REVENUE AUDIT THEREAFTER WRO TE TO THE CIT THAT THE AO'S STAND WAS NOT CORRECT. BASED ON THIS, THE A.O. ISSUED NOTICE U/S 148 (WITHIN 4 YEARS FROM THE END OF THE ASSESSM ENT YEAR) TO RE- OPEN THE ASSESSMENT AND DISALLOW THE EXPENDITURE. T HE ASSESSEE CHALLENGED THE REOPENING ON THE BASIS THAT THE AO W AS COMPELLED BY THE AUDIT PARTY TO RE-OPEN THE ASSESSMENT THOUGH HE WAS OF THE BELIEF THAT NO INCOME HAD ESCAPED ASSESSMENT. HELD BY THE HIGH COURT UPHOLDING THE PLEA. IF THE AUDIT PARTY BRINGS CERTA IN ASPECTS TO THE NOTICE OF THE A.O., HE IS ENTITLED TO REOPEN THE AS SESSMENT AFTER FORMING HIS OWN BELIEF. HOWEVER, IF THE A.O. ACTS UNDER COM PULSION OF THE AUDIT PARTY, AND NOT INDEPENDENTLY, THE ACTION OF RE-OPEN ING WOULD BE VITIATED. ON FACTS, IT IS CLEARLY ESTABLISHED THAT THE A.O. WAS UNDER COMPULSION FROM THE AUDIT PARTY TO ISSUE NOTICE FOR REOPENING BECAUSE AFTER THE AUDIT PARTY BROUGHT THE CONTROVERSIAL ISS UE TO THE NOTICE OF THE A.O., HE DID NOT AGREE TO THE PROPOSAL FOR RE-EXAMI NATION OF THE ISSUE AND WROTE A LETTER AND GAVE ELABORATE REASONS WHY T HE ASSESSMENT ORDER WAS CORRECT. THE S. 148 NOTICE WAS ISSUED ONL Y AFTER THE REVENUE AUDIT WROTE TO THE CIT REITERATING ITS STAND THAT I NCOME HAD ESCAPED ASSESSMENT. CONSEQUENTLY, THE S.148 NOTICE HAD TO B E QUASHED (CADILA HEALTHCARE LTD. VS. ACIT (2012) 65 DTR 385 (GUJ.) F OLLOWED; CIT V/S P.V.S. BEEDIES PVT. LTD., (1999) 237ITR 13 (SC) REFERRED) IN THIS CASE ALSO THE A.O. WAS NOT AGREED TO THE P ROPOSAL FOR RE- EXAMINATION OF THE ISSUE BY GIVING THE REASON BUT U NDER COMPULSION THE ACTION WAS TAKEN. THE FACT MAY BE VERIFIED BY Y OUR HONOUR FROM THE RECORD. FURTHERMORE WHERE IT WAS CLEAR FROM THE ORIGINAL A SSESSMENT ORDER AS WELL AS ORDER MADE BY THE APPELLATE AUTHORITY THAT THE ASSESSING OFFICER WAS WELL AWARE ABOUT THE PRIMARY FACTS, VIZ. THE CL AIM MADE BY THE ASSESSEE, THE CIRCUMSTANCES UNDER WHICH THE CLAIM W AS MADE, AND THE PROVISION OF LAW WHICH COULD BE APPLIED WHILE GRANT ING THE BENEFITS, AND THE ASSESSING OFFICER CONSCIOUSLY CONSIDER THE FACTS AND ARRIVED 11 AT A DECISION, THE ASSESSMENT CAN'T BE REOPENED MER ELY BECAUSE SUBSEQUENTLY THE ASSESSING OFFICER CHANGES HIS OPIN ION OR SOME OTHER OFFICER TAKES THE DIFFERENT VIEW. A DECISION IS RIG HT OR WRONG IS NONE OF THE CONCERN OF THE SUBSEQUENT OFFICER. IF THE PRIMA RY FACTS WERE NOT AVAILABLE OR THERE WAS CONCEALMENT OR THERE WAS NO APPLICATION OF MIND AT ALL, THEN A CASE FOR REOPENING THE ASSESSMENT CO ULD BE MET OUT. SITA WORLD TRAVEL (INDIA) LTD., V/S CIT (2004) 140 TAXMAN 381 (DELHI). THE HON'BLE SUPREME COURT IN THE CASE OF ACIT V/S ICICI SECURITIES PRIMARY DEALERSHIP LTD., 24 TAXMAN.COM 310 HAS HELD THAT WHERE ACCOUNTS HAS BEEN FURNISHED BY THE ASSESSEE WHEN CA LLED UPON AND THEREAFTER ASSESSMENT WAS COMPLETED U/S 143(3) SUBS EQUENTLY ON A MERE RELOOK OF SAID ACCOUNTS EARLIER FURNISHED BY A SSESSEE, IT IS NOT PERMISSIBLE U/S 147 TO REOPEN ASSESSMENT OF ASSESSE E ON GROUND THAT INCOME HAS ESCAPED ASSESSMENT. THAT IN THE CASE OF ACIT, CIRCLE BARMER V/S SHRI N AKHAT SINGH BHATI THE HON'BLE ITAT JODHPUR HAS HELD AS REPORTED IN TAX WO RLD VOL. 49PAGE 111 (MAY,2013 ISSUE) THAT 'SINCE THE RE-OPENING OF THE ASSESSMENT U/S 147 OF IT ACT. WAS SOLELY ON THE OBJECTION OF AUDIT PAR A, THEREFORE THE REASSESSMENT PROCEEDING ARE NOT VALID'. KUMAR STORE VS. CIT (2012) 340 ITR 90 (PAT.) IGNOR ING THE FINDING OF THE PREDECESSOR ON THE ISSUE WAS A CASE OF CHANGE O F OPINION ON THE SAME SET OF FACTS. THE REASSESSMENT WAS INVALID. - 21 TAXMAN.COM 330 (GUJ.) THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND WHI LE TAKING ACTION U/S 147/148 AND ONLY RELIED WHAT THE AUDIT PARTY HAS ST ATED BEFORE RELYING WHAT THE AUDIT PARTY HAS SAID HE SHOULD VERIFY THE CORRECTNESS OF THE DOCUMENTS RELIED ON BY THE AUDIT PARTY AND SUBMITTE D BY THE ASSESSEE TO THE A.O. MOREOVER AS PER REASON RECORDED BY THE A.O. THE GAIN SHOULD BE TAXED AS NORMAL LTCG, BUT WHILE MAKING ASSESSMEN T ON LAST PARA OF PAGE NO. 5 WROTE 'AND SHOULD BE TAXED AS NORMAL LTC G, 'AND IN PARA 1 OF PAGE 6 STATED' WHICH ASSESSEE HAS EARNED IN THE NORMAL BUSINESS ACTIVITY' AND IN THE NEXT PARA OF SAME PAGE STATED' INCOME CAPITAL GAIN (STT) .U/S 10(38) IS NOT ALLOWED AND THIS DECLARED INCOME IS TREATED INCOME INCURRED FROM OTHER SOURCE'. THUS IT IS CLEA R THAT A.O. HIMSELF IS NOT SURE ABOUT THE HEAD OF INCOME TO ASSESS. THIS I S ALSO NOT PERMITTED UNDER EYE OF LAW. WHERE THE ASSESSMENT WAS COMPLETED HOLDING THAT TH E INCOME FROM CONVERSION OF EQUITY SHARE FROM STOCK IN TRADE TO I NVESTMENT WAS BUSINESS INCOME. RE-ASSESSMENT PROCEEDINGS INITIATE D MERELY BY 12 TAKING VIEW THAT INCOME SHOULD BE TAXED UNDER THE H EAD SHORT TERM CAPITAL GAIN AMOUNTED TO A MERE CHANGE OF OPINION A S SUCH LIABLE TO BE QUASHED. RITU INVESTMENT PVT. LTD., V/S CIT (2011) 51 DTR 1 62 (DELHI HC). RE-ASSESSMENT PROCEEDING INITIATED BY THE A.O. TO ASSESS INCOME UNDER THE HEAD 'PROFIT AND GAIN OF BUSINESS OR PROFESSION ' INSTEAD OF CAPITAL GAIN AS DECLARED BY THE ASSESSEE AND AS ASSESSED BY THE A.O. WAS HELD TO BE INVALID AS THE ASSESSEE HAD MADE DISCLOSURE O F ALL MATERIAL FACTS WHICH INCLUDED CAPITAL GAIN. GUJRAT FLUORO CHEMICAL LTD., V/S DY. CIT (2008) 15 DTR 1/223 CTR 398/319ITR 282 (GUJ. HC). ASHWAMEGH COOP. HOUSING SOCIETY LTD., VIBHAG 2 V/S DCIT (GUJ.) IN THE CASE OF M/S MEGHMANI ORGANICS LTD., V/S ASS TT. CIT (2012). THE HON'BLE GUJRAT HIGH COURT HAS HELD THAT WHERE ASSES SEE IN ORIGINAL ASSESSMENT PROCEEDINGS HAD FULLY DISCLOSED DETAILS IN RESPECT OF PAYMENT OF CUSTOM DUTY AND HAD FURNISHED COPY OF ACCOUNT OF PARTIES TO WHOM SALES COMMISSION WAS PAID. ASSESSING OFFICER WAS NO T JUSTIFIED IN RE- OPENING ASSESSMENT WITH RESPECT TO SAID ISSUE. IT IS ALSO WELL SETTLED LAW AS ALREADY SUBMITTED T HAT IF THE PROCEEDING U/S 148 HAS BEEN TAKEN ON THE BASIS OF OBSERVATION MADE BY THE AUDIT PARTY THE SAME IS ILLEGAL AB-INITIO. AGRICULTURAL PRODUCE MARKET COMMITTEE V/S ITO (201 1) 63 DTR 7 (GUJ. HC). IN THE CASE OF ACIT V/S M.K.EXIM (INDIA) LTD., THE ITAT JAIPUR BENCH AS REPORTED IN VOL. 47 TAX WORLD PAGE 206 AFTER RELYIN G ON 217 CTR (RAJ.) 345 (2008) 8 DTR (RAJ.) 118,306 ITR 343 (RAJ.) IT I S HELD THAT THE AUDIT CAN'T PRONOUNCE THE LAW AND THEIR INFORMATION ON TH E ISSUE CAN'T BE MADE A GROUND FOR RE-OPENING THE ASSESSMENT. IN THE CASE OF INDIAN & SASTRU NEW PAPER SOCIETY V /S CIT 119 ITR 996 THE HON'BLE SUPREME COURT HAS HELD THAT WHETHER AN ASSE SSMENT HAS ESCAPED ASSESSMENT OR NOT MUST BE DETERMINED BY THE A.O. HIMSELF THE A.O. CAN'T BLINDLY FOLLOW THE OPINION OF AN AUDIT A UTHORITY FOR THE PURPOSE OF ARRIVING AT A BELIEF THAT INCOME HAS ESC APED ASSESSMENT. THE SAME HAS ALSO BEEN FOLLOWED BY THE HON 'BLE BOM BAY HIGH COURT IN THE CASE OF ICICI HOME FINANCE CO. LTD.,V/S ACIT-2' 5 TAXMAN.COM 241 (2012). 13 WHERE THERE WAS NO ESCAPEMENT OF ASSESSMENT OR NO ASSESSMENT IN RESPECT OF SAID HEAD, WHICH FORMED REASON TO BELIEV E IN NOTICE AND IN RESPECT OF OTHER INCOME NO NOTICE WAS ISSUED AND AS SESSEE HAD NO OPPORTUNITY TO PUT FORWARD HIS CASE UNDER SECTION 1 52(2) TO AVAIL BENEFIT OF SAID SECTION. THUS THE SOLE REASON OF RE -OPENING OF THE ASSESSMENT FAILS. IN THE CASE OF ARTCH INFO STEMS PVT. LTD., V/S CIT (2012) 206 TAXMAN 432 THE HON'BLE DELHI HIGH COURT HAS HELD THAT IF A .O. HAS PROCEEDED ON WRONG FACTUAL BASIS THE RE-OPENING PRO CEEDING IS INVALID. IN VIEW OF THE LEGAL OPINION THE NOTICE ISSUED ON T HE BASIS OF OBSERVATION OF THE AUDIT PARTY AND ACCORDINGLY THE ASSESSMENT PASSED BY THE A.O. DESERVE TO BE ANNULLED. ON MERIT ALSO WE SUBMIT THAT DURING THE COURSE OF O RIGINAL ASSESSMENT, THE ASSESSEE HAS SUBMITTED ALL DETAILS JUSTIFYING THE INCOME AS LONG TERM CAPITAL GAIN AND EXEMPTED U/S 1 0(38) OF IT ACT AND THE A.O. HAS ACCEPTED AFTER DUE VERIFICATION IN DETAIL THE SAID INCOME AS LONG TERM CAPITAL GAIN EXEMPTED U/S 10(38 ), HENCE REQUEST TO TREAT THE SAME AS INCOME FROM LONG TERM CAPITAL GAIN EXEMPTED U/S 10(38) OF IT ACT. ' 6. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE CLAIMED LONG T ERM CAPITAL GAIN OF RS. 1,17,70,195/- ON WHICH STT WAS PAID, AS EXEMPT UNDER SECTION 10(38) OF THE ACT. IN THE ORIGINAL RETURN OF INCOME FILED ON 27/01/2009 AND DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSE SSEE FILED THE DETAILS OF LONG TERM CAPITAL GAINS WHICH REVEALED THAT TOTA L SALES OF SHARES FOR THE PURPOSE OF LONG TERM CAPITAL GAIN WAS RS. 1,60,44,5 59/- AND PURCHASE VALUE WAS AT RS. 42,74,365/-. ACCORDINGLY, THE LON G TERM CAPITAL GAIN OF RS. 1,17,70,194/- WAS SHOWN AND DETAILED CHART IN T HIS RESPECT WAS 14 FURNISHED BEFORE THE ASSESSING OFFICER. THE LD. CI T(A) FURTHER OBSERVED THAT THE ASSESSEE WAS REQUIRED TO FURNISH THE FOLLO WING DETAILS VIDE LETTER DATED 21/09/2010 BY THE ASSESSING OFFICER AS UNDER: - '1. NATURE OF INCOME FROM OTHER SOURCES DECLARED BY YOU IN THE RETURN OF INCOME FILED ON 31.07.2009 SHOULD BE GIVEN IN DETAI L. PLEASE GIVE COMPLETE DETAILS LIKE NATURE & SOURCE OF EXEMPT CAPITAL GAIN INCOME RECEIVED AT RS. 1,17,70,195/- IN THIS ASSTT. YEAR. PROOF OF SALE OF LISTED EQUITY SHARES ON STOCK EXCHANGE WITH PAYMENT OF SECURITY TRANSACTION TAX S HOULD BE PRODUCED FOR VERIFICATION TO CLAIM EXEMPT INCOME U/S 10(38). ' 7. THE LD. CIT(A) POINTED OUT THAT THE ASSESSEE VIDE LETTER DATED 08/11/2010 REPLIED TO THE ASSESSING OFFICER AS UNDE R:- '1. THAT THE NATURE OF INCOME FROM OTHER SOURCE DEC LARED IN THE RETURN OF INCOME IS IN RESPECT OF INTEREST INCOME AND THE DET AIL HAS ALREADY BEEN SUBMITTED. LIKEWISE DETAIL OF EXEMPTED LONG TERM CA PITAL GAIN INCOME WITH REFERENCE TO THAT OF PURCHASE OF SHARE ALONG WITH T HE OF SALE AND OTHER RELATED DETAIL ALREADY SUBMITTED. SOME OF THE COPIE S OF SALE VOUCHERS OF EQUITY SHARES AND STT PAID HAS ALREADY BEEN SUBMITT ED WHICH WERE VERIFIED WITH ORIGINAL VOUCHER BY YOUR HONOUR. THUS THE CLAI M OF EXEMPTED INCOME UNDER SECTION 10(38) IS RIGHTLY CLAIMED BY THE ASSE SSEE.' THE LD. CIT(A) OBSERVED THAT AFTER CONSIDERING THE ABOVE REPLY, THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT WA S PASSED BY THE ASSESSING OFFICER AND THE EXEMPTION UNDER SECTION 1 0(38) OF THE ACT WAS ALLOWED BY HOLDING AS UNDER:- '3. THE ASSESSEE HAS DECLARED SALARY INCOME, NET LO NG TERM CAPITAL GAIN INCOME ON SALE OF EQUITY SHARES OF VARIOUS COMPANIE S AT RS. 1,17,70,195/ IN THIS A. Y. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS THE AR OF THE ASSESSEE HAD FILED COMPLETE DETAILS/ CHART OF LONG TERM CAPI TAL GAIN EARNED BY THE 15 ASSESSEE ON THE SALE OF EQUITY SHARES. THE ASSESSEE HAS ALSO FILED DETAILS OF SHARE PURCHASED AND SHARES SOLD OF LISTED COMPANIES DURING THIS ASSESSMENT YEAR AND HAS PAID SECURITY TRANSACTION TAX ON SUCH SALE OF LISTED SHARES. ' THE LD. CIT(A) FURTHER OBSERVED THAT DURING THE CO URSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE I SSUE REGARDING CLAIM OF EXEMPTION U/S 10(38) OF THE ACT IN RESPECT OF EQ UITY SHARES HAD BEEN CONSIDERED AND ALLOWED BY THE ASSESSING OFFICER AFT ER CONSIDERING ALL THE DOCUMENTS ON RECORD. THEREFORE, THE REOPENING U/S 148 OF THE ACT BY STATING THAT EXEMPTION U/S 10(38) OF THE ACT WAS NO T ALLOWABLE IN RESPECT OF SALE PROCEEDS OF ABOVE SHARES, CONSTITUTED A CHA NGE OF OPINION WHICH DOES NOT EMPOWER THE ASSESSING OFFICER TO REOPEN TH E ASSESSMENT. REFERENCE WAS MADE TO THE JUDGMENT OF THE HON'BLE S UPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. REPORTED I N 320 ITR 561. THE LD. CIT(A) ALSO OBSERVED THAT IN THIS CASE AUDIT OBJECT ION WAS RAISED THAT AS PER FORM NO. 10DB IN CODE NO.1 (PURCHASE OF EQUITY SHARES VALUE OF TRANSACTIONS DURING THE FINANCIAL YEAR) SHOWS THE PURCHASES OF RS. 1,60,43,786/- AND IN CODE NO.2 SALE AMOUNT AT RS. 2 ,43,698/-. BASED ON THE ABOVE SAID FORM, AUDIT OBJECTION WAS TAKEN. TH E LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD CLAIMED THAT THE SAID DOCUMEN T WAS NOT LEGALLY RELATED AND APPLICABLE TO THE ASSESSEE AND FORM NO. 10DB WAS FILED BY THE ASSESSEE AT THE STAGE OF AUDIT OBJECTION VIDE L ETTER DATED 21/07/2011 16 WHICH REVEALED THAT AS PER CODE NO.1 THE PURCHASES SHOWN DURING THE FINANCIAL YEAR WERE OF RS. 2,42,698/- AND AS PER CO DE NO.2, THE SALES DURING THE FINANCIAL YEAR OF EQUITY SHARES WERE OF RS. 1,60,43,786/-. THE LD. CIT(A) POINTED OUT THAT THE FIGURES OF PURCHASE AND SALES HAD BEEN INTERCHANGED IN THE ORIGINAL FORM NO. 10DB WHICH HA D BEEN CORRECTED IN THE FORM SUBMITTED VIDE LETTER DATED 21/07/2011. TH EREFORE, THE WRONG FIGURES OF SALES MENTIONED IN THE FORM NO. 10DB BAS ED ON WHICH THE CASE WAS REOPENED DID NOT GO TO CHANGE THE NATURE OF TRA NSACTIONS ENTERED INTO BY THE ASSESSEE ESPECIALLY WHEN DETAILED NOTE OF SHARES PURCHASED AND SOLD HAD BEEN PRODUCED BY THE ASSESSEE. THE LD . CIT(A) POINTED OUT THAT THE FORM NO. 10DB WAS REQUIRED TO BE FILED ONL Y BY THE ASSESSEE HAVING BUSINESS INCOME FROM TAXABLE SECURITIES TRAN SACTIONS AND CLAIMING THE DEDUCTION U/S 88E OF THE ACT W.E.F. A.Y. 2009-1 0 BUT THE ASSESSEE HAD ALSO NOT CLAIMED THE DEDUCTION UNDER THE SAID SECTI ON. THE LD. CIT(A) ALSO STATED THAT THE ASSESSING OFFICER DURING THE C OURSE OF ORIGINAL ASSESSMENT PROCEEDINGS HAD EXAMINED THE ISSUE REGAR DING THE PAYMENT OF STT IN RESPECT OF SALE OF EQUITY SHARES, FROM THE C ONTRACT NOTES AND THE BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE AND HAD ALLOWED EXEMPTION U/S 10(38) OF THE ACT AND THAT BEFORE REOPENING THE ASSESSMENT, IT HAD NOT BEEN BROUGHT ON RECORD THAT STT WAS NOT CHARGED ON THE ABOVE SALES 17 TRANSACTIONS. THEREFORE, REOPENING U/S 148 OF THE A CT WAS NOT SUSTAINABLE. THE LD. CIT(A) ALSO OBSERVED THAT THER E HAD BEEN ASSUMPTION THAT NO STT HAD BEEN PAID ON SALE OF SHARES OF RS. 1,15,26,497/- WITHOUT ANY BASIS AS THE ASSESSEE HAD PRODUCED BOOKS OF ACC OUNTS AND CONTRACT NOTES IN SUPPORT OF PAYMENT OF STT AND THE ASSESSIN G OFFICER HAD NOT BROUGHT ON RECORD THAT THE STT HAD NOT BEEN PAID ON THE ABOVE SALE TRANSACTIONS OF THE SHARES EVEN WHEN THE ASSESSEE HAD BEEN CLAIMING THAT THE STT HAD BEEN PAID AND EVIDENCE WAS PRODUCE D DURING THE ORIGINAL ASSESSMENT PROCEEDINGS BEFORE THE ASSESSIN G OFFICER. ACCORDINGLY, THE LD. CIT(A) HELD THAT THE REOPENING OF THE ASSESSMENT AND CONSEQUENTLY ADDITION MADE BY THE ASSESSING OFFICER WAS NOT SUSTAINABLE IN LAW. NOW THE DEPARTMENT IS IN APPEAL. 8 . LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSM ENT ORDER DATED 27/04/2012. 9 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR TH E ASSESSEE REITERATED THE SUBMISSIONS BEFORE THE AUTHORITIES BELOW AND FU RTHER SUBMITTED THAT THE ASSESSING OFFICER WHILE FRAMING THE ORIGINAL AS SESSMENT HAD VERIFIED EACH AND EVERY TRANSACTION WHICH WAS SUBJECTED TO S TT AND THEREAFTER 18 THE EXEMPTION U/S 10(38) OF THE ACT WAS ALLOWED. H E ALSO REFERRED PAGE NO. 19 OF THE ASSESSEES COMPILATION IN SUPPORT OF THE ABOVE CONTENTION. LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE REOPENING IN THE PRESENT CASE WAS ONLY ON THE BASIS OF CHANGE OF OPI NION WHICH IS NOT ALLOWABLE, THEREFORE, THE LD. CIT(A) RIGHTLY HELD T HAT THE REOPENING OF THE ASSESSMENT WAS NOT SUSTAINABLE IN THE LAW. 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSING OFFICER WHIL E FRAMING THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 0 8/11/2010 EXAMINED THE ISSUE RELATING TO THE LONG TERM CAPITAL GAIN CL AIMED AS EXEMPT UNDER SECTION 10(38) OF THE ACT. IN THE SAID ASSESSMENT ORDER AT PARA 3 THE ASSESSING OFFICER CATEGORICALLY STATED THAT THE ASS ESSEE HAD FILED COMPLETE DETAILS/CHART OF LONG TERM CAPITAL GAIN EA RNED ON THE SALE OF EQUITY SHARES AND ALSO FILED THE DETAILS OF SHARES OF LISTED COMPANIES PURCHASED AND SOLD DURING THE YEAR RELEVANT TO ASSE SSMENT YEAR UNDER CONSIDERATION AND HAD PAID STT ON SUCH SALE OF LIST ED SHARES, THEREAFTER, HE ALLOWED THE EXEMPTION. SO, IT IS CLEAR THAT THE ASSESSING OFFICER WHILE FRAMING THE ORIGINAL ASSESSMENT U/S 143(3) OF THE A CT NOT ONLY EXAMINED THE DETAILS FURNISHED BY THE ASSESSEE BUT ALSO APPL IED HIS MIND WHILE 19 ALLOWING THE EXEMPTION U/S 10(38) OF THE ACT. THER EFORE, THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT WAS ONLY ON ACC OUNT OF CHANGE OF OPINION WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW . THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) RIGHTLY HELD THAT THE REOPENING OF THE ASSESSMENT AND CONSEQUENTIAL ADDITION MADE BY THE A SSESSING OFFICER WAS NOT SUSTAINABLE IN LAW. WE DO NOT SEE ANY VALID GR OUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. 11 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 10 TH JUNE, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH JUNE, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.