Appeal details
Counselvise Citation
7423314 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-09-2013
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
12-09-2013
Assessment Year
2003-2004
Appeal Filed On
15-02-2012
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. 74/JODH/2012 (A.Y. 2003-04) ITO, VS. DINESH JAIN, HUF, WARD 2(1), 47, SHASTRI MARG, UDAIPUR. UDAIPUR. PAN NO. AACHD8903P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN & SHRI RAJENDRA JAIN DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 12/09/2013. DATE OF PRONOUNCEMENT : 20/09/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 14/12/2011 OF LD. CIT (A), UDAIPUR. THE ONLY GROUN D RAISED IN THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER P ASSED U/S 147/143(3) OF 2 THE I.T. ACT ON THE TECHNICAL GROUNDS WITHOUT APPRE CIATING THE PROVISIONS OF SECTION 292B OF THE I.T. ACT. 2. FACTS OF THIS CASE IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31/03/2004 BY SHOWING LONG TERM CAPITAL G AIN OF RS. 18,33,466/-, WHICH WAS CLAIMED EXEMPT UNDER SECTION 54F OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS ACT, FOR SHORT). LATER ON, IT WAS FOUND THAT THE TRANSACTIONS OF PURCHASE AND SALES OF SHAR ES THROUGH THE STOCK BROKER M/S. GOLDSTAR FINVEST (PVT.) LTD. WERE NOT R EAL AND THE OPERATOR OF THE ABOVE FLOATED STOCK BROKING COMPANIES M/S. MUKE SH M. CHOKSI ADMITTED THAT HE WAS INVOLVED IN PROVIDING ACCOMMOD ATION ENTRIES IN VARIOUS MODES SUCH AS LONG TERM CAPITAL GAINS/SHORT TERM CAPITAL GAINS ETC. THROUGH THE ABOVE COMPANY AND THE ASSESSEE WAS ONE OF THE BENEFICIARY OF SUCH TRANSACTIONS. ACCORDINGLY, THE CASE WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 30/0 3/2010 AND THE COPY OF THE REASONS WAS SUPPLIED TO THE ASSESSEE. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LEARNED CIT(A) AND SUBMITTED THAT THE FOLLOWING REASONS FOR ESCAPEMENT OF TAXABLE INCOME WERE RECORDED BY THE ASSESSING OFFIC ER:- NAME OF THE ASSESSEE : SHRI DINESH JAIN (HUF) ADDRESS OF THE ASSESSEE : 47, SHASTRI MARG, UDA IPUR PAN : AACHD8903P 3 STATUS : INDIVIDUAL ASSESSMENT YEAR : 2003-04 REASONS FOR REOPENING OF CASE U/S 148 IN THIS CASE, THE ABOVE ASSESSEE HAS FILED HIS RET URN OF INCOME FOR A.Y. 2003-04 ON 31/03/2004. AS PER INFORMATION GATHERED, SHRI D INESH JAIN (HUF) HAS ENTERED INTO TRANSACTIONS OF RS. 18,33,466/- WITH M /S. M/S. MAHASAGAR SECURITIES PVT. LTD., MUMBAI (NOW ALAG SECURITIES P VT. LTD.) IN F.Y. 2003-04. AS GATHERED, MAHASAGAR SECURITIES PVT. LTD., MUMBAI (N OW ALAG SECURITIES PVT. LTD.) IS ENGAGED IN THE BUSINESS OF PROVIDING FRAUD ULENT BILLS FOR BOGUS SPECULATION PROFIT/LOSS, STCG/LTCG, COMMODITY PROFI T/LOSS ON COMMODITY TRADING. THE ASSESSEE IS ONE OF THE BENEFICIARY OF THESE FRAUDULENT BILLING ACTIVITIES BY THE ABOVE CONCERN. IN VIEW OF THE ABOVE, I HAVE TO BELIEVE THAT AN IN COME OF RS. 18,33,466/- WAS UNDER ASSESSED AND HAS ESCAPED ASSESSMENT IN TERMS OF SECTION 147. SD/- INCOME-TAX OFFICER, WARD-2(1), UDAIPUR. COPY OF THE REASONS RECORDED BY THE ASSESSING OFFI CER WERE FURNISHED BY THE ASSESSEE TO THE LEARNED CIT(A) AND IT WAS SUBMITTED THAT THE REASONS RECORDED WERE NOT CORRECT BECAUSE OF TH E FOLLOWING EXPLANATION:- (I) THE STATUS OF THE ASSESSEE HAS BEEN RECORDED AS INDIVIDUAL INSTEAD OF HUF. (II) IT IS HUMBLY SUBMITTED THAT THE INFORMATION GA THERED DOES NOT, IN ANY MANNER, DILUTE THE LEGAL REQUIREMENTS ESTABLISHED S INCE LONG FOR TAKING ACTION U/S 147 OF THE ACT. THE LD. AO SHOULD HAVE 'REASON S TO BELIEVE AND NOT REASONS TO SUSPECT. IN THE PRESENT CASE, WHILE RECORDING THE REASONS TH E LD. A0 STATED THAT THE ASSESSEE HAS ENTERED INTO TRANSACTION WITH M/S MAHA SAGAR SECURITIES PVT. LTD., MUMBAI (NOW ALAG SECURITIES PVT. LTD.), WHICH IS NO T FACTUALLY CORRECT. NO SUCH TRANSACTION WAS ENTERED INTO BY THE ASSESSEE. THIS VERY FACT IS ALSO EVIDENT FROM THE IMPUGNED AS SESSMENT ORDER ITSELF. IN FACT, DURING THE RELEVANT YEAR, THE TRANSACTION WAS ENTERED INTO BY THE ASSESSEE THROUGH STOCK BROKER GOLD STAR FINVEST (P) LTD. AND NOT FROM THE COMPANY AS RECORDED IN THE REASONS FOR RE-OPENING OF ASSESSMEN T. THE LD. AO HAS ACTED MERELY ON SUSPICION WITHOUT GOING INTO THE MATERIAL AVAILABLE ON RECORDS. THE 4 APPELLANT-ASSESSEE ALONG WITH ITS RETURN OF INCOME FURNISHED COPIES OF SHARE PURCHASE & SALE BILLS IN SUPPORT OF ITS CLAIM OF LT CG. IN THE SAID BILLS ITSELF NAME OF THE BROKER THROUGH WHICH SUCH TRANSACTIONS WERE ENTERED INTO IS GIVEN. BUT THE LD. AO EVEN DID NOT EXAMINE THE MATERIAL AV AILABLE ON HIS OWN RECORD AND MERELY PROCEEDED ON THE REPORT OF OTHERS. (III) IT IS FURTHER SUBMITTED THAT THERE MUST BE A DIRECT NEXUS OR LIVE LINK BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE A0 AND THE FORMATION OF THE BELIEF THAT THERE HAS BEEN ESCAPEMENT OF INCOME OF THE ASSESSEE FROM ASSESSMENT IN A PARTICULAR YEAR. IT IS ALSO A SETT LED PROPOSITION THAT THE MATERIAL FOR THE FORMATION OF THE BELIEF HAS TO BE DEFINITE AND RELEVANT. IN THE PRESENT CASE, DURING THE RELEVANT YEAR, THE TRANSACTION WAS ENTERED INTO BY THE ASSESSEE THROUGH GOLD STAR FINVEST (P) LTD, AND NOT FROM THE COMPANY AS RECORDED IN THE REASONS FOR RE-OPENING OF ASSESSMEN T. THIS SHOWS ABSENCE OF NEXUS OR LIVE LINK BETWEEN THE MATERIAL COMING TO T HE NOTICE OF THE A0 AND THE FORMATION OF THE BELIEF. IT ALSO SHOWS LACK OF ENQU IRY BY THE LD. AO IN ORDER TO FORM A BELIEF REGARDING ESCAPEMENT OF INCOME. (IV) IT IS RESPECTFULLY SUBMITTED THAT THERE IS COM PLETE LACK OF APPLICATION OF MIND BY THE LD. AO. IN ABSENCE OF ANY TRANSACTION W ITH THE SAID COMPANY, HOW THE LD. AO HAS FORMED A BELIEF THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES OF THESE FRAUDULENT BILLING ACTIVITIES BY THE ABOVE CO MPANY. THE AO CANNOT RE- OPEN THE ASSESSMENT MERELY ON THE BASIS OF INFORMAT ION RECEIVED WITHOUT APPLYING HIS MIND TO THE INFORMATION AND FORMING AN OPINION. THE REASONS MUST SHOW DUE APPLICATION OF MIND TO THE INFORMATION, WH ICH IS NOT PRESENT IN THE INSTANT CASE. (V) THE AMOUNT OF TRANSACTION AND ESCAPEMENT OF INC OME IS STATED AS RS,18,33,466/- WHILE RECORDING THE REASONS FOR RE-O PENING, IN THIS CONNECTION, IT IS HUMBLY & RESPECTFULLY SUBMITTED THAT THE LD. AO HAS ARRIVED AT THE ABOVE FIGURE OF UNDER ASSESSMENT OF INCOME AS PER RETURN OF INCOME AS FOLLOWS: LONG TERM CAPITAL GAIN SALE OF 22000 NO. OF SHARES OF BUNIYAD CHEMICALS LTD. ON FOLLOWING DATES: NO. OF SHARES AMOUNT (RS.) 06.12.2002 7000 506336/- 17.12.2002 8000 740706/- 24.12.2002 7000 599735/- ---------- 5 TOTAL 1846777/- LESS: SHARE PURCHASES ON 30.05.2001 13311/- INCLUDING BROKERAGE ------------- LTCG 1833466/- ------------- IT IS, THEREFORE, VERY CLEAR FROM THE ABOVE THAT WH ILE RECORDING THE REASONS, THE LD. AO HAD NO REASON IN HIS MIND TO DOUBT THE PURCH ASE OF SHARES. THEREFORE, ONCE PURCHASE OF SHARE WAS UNDISPUTED, ITS SALE CAN NOT BE BOGUS BUT NO REASON FOR OTHERWISE BELIEF IS RECORDED BY THE LD. AO. (VI) ON GOING THROUGH THE REASONS RECORDED BY THE LD. AO, IT MAY CLEARLY BE SAID THAT THE AO DID NOT HAVE ANY RELEVANT MATERIAL IN HIS POSSESSION FOR INITIATING THE PROCEEDINGS UNDER SECTION 147. THIS IS VERY MUCH CLEAR FROM THE REASONS RECORDED BY THE A0 AS MENTIONED HERE-IN-ABO VE, BECAUSE THE AO HAS NOT GIVEN ANY DETAILS/RECORDS FROM WHICH HE HAD FOR MED THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD. A O HAS ALSO NOT GIVEN THE NATURE OF TRANSACTION ENTERED INTO, DETAILS OF THE COMPANY WHOSE SHARES WERE PURCHASED & SOLD, HOW THE TRANSACTIONS WERE HELD TO BE BOGUS, FINANCIAL YEAR OF THE TRANSACTION WAS ALSO RECORDED AS 2003-03, MEANI NG THEREBY THAT HE HIMSELF WAS NOT CLEAR ABOUT THE YEAR OF ALLEGED ESCAPEMENT I.E. F.Y. 2002-03 OR 2003- 04. IT IS NOT THE CASE OF THE LD. AO THAT HE HAS GA THERED THE INFORMATION ON ENQUIRY CONDUCTED BY HIS OWN AND IN FACT, THIS CLAI M CANNOT BE MADE BECAUSE THE INFORMATION ITSELF SUFFERS FROM INCORRECTNESS A S STATED HERE-IN-ABOVE. HE MERELY RELIED UPON OTHERS WITHOUT VERIFYING FACTS A VAILABLE ON RECORDS AS SUBMITTED IN THE PRECEDING PARAGRAPHS. (VII) MOREOVER, THE DATE OF RECORDING REASONS IS AL SO NOT MENTIONED IN THE COPY OF THE REASONS PROVIDED TO THE APPELLANT AND STATUS OF THE APPELLANT-ASSESSEE IS ALSO WRONGLY MENTIONED AS INDIVIDUAL. (VIII) IT IS ALSO SUBMITTED THAT IN THE CASE WHERE THE AO HOLD THE OPINION THAT THE INCOME HAS ESCAPED ASSESSMENT, THE REASONS RECO RDED BY THE AO MUST DISCLOSE BY WHAT PROCESS OF REASONING HE HOLD SUCH A BELIEF, IT IS RESPECTFULLY SUBMITTED THAT THE VALIDITY OF INITIATION OF PROCEE DINGS UNDER SECTION 147 HAS TO BE JUDGED WITH REFERENCE TO THE MATERIAL AVAILABLE WITH THE AO AT THE TIME OF ISSUE OF NOTICE UNDER SECTION 148 AND CANNOT BE SUB STANTIATED BY REFERENCE TO THE MATERIAL THAT MAY HAVE COME TO THE LIGHT SUBSEQ UENTLY IN THE COURSE OF ASSESSMENT PROCEEDINGS. HE SHOULD HAVE, THEREFORE, SET OUT CLEARLY THE FULL DETAILS OF SUCH MATERIAL AND THAT IF HE DOES NOT DO SO AND LATER ON IT IS FOUND THAT HE HAD NO MATERIALS, THE INITIATION OF PROCEED INGS NEED TO BE QUASHED. (IX) IT IS RESPECTFULLY SUBMITTED THAT THE POWERS O F THE A0 IN INITIATING THE RE- ASSESSMENT PROCEEDINGS ARE WIDE BUT IT HAS BEEN REP EATEDLY POINTED OUT BY THE COURTS THAT THEY ARE NOT PLENARY. THESE POWERS ARE VITALLY CONTROLLED BY THE WORDS 'REASON TO BELIEVE EMPLOYED BY THE SECTION. REASON FOR FORMATION OF BELIEF FOR RE-OPENING THE ASSESSMENT MUST HAVE A RA TIONAL CONNECTION OR 6 RELEVANT BEARING ON THE FORMATION OF BELIEF. THE EX ISTENCE OR OTHERWISE OF SUCH A BELIEF, ON THE PART OF THE AO, IS THE VERY FOUNDA TION OF HIS JURISDICTION. AS ALREADY SUBMITTED ABOVE, THE REASONS RECORDED DO NO T PROVIDE ANY REASONABLE BASIS FOR FORMATION, OF BELIEF OF ESCAPEMENT OF INC OME. THESE REASONS AS SUCH MAY CAUSE MERE SUSPICION BUT IN NO WAY PROVIDE ANY REASONABLE BASIS TO ENTERTAIN A BELIEF AS TO THE ESCAPEMENT OF ASSESSEE S TAXABLE INCOME FROM ASSESSMENT. THE LD. A0 HAS NOT CONVERTED THE SUSPIC ION INTO BELIEF. THE ABOVE PROPOSITION OF LAW IS WELL SETTLED. IN T HIS REGARD, REFERENCE IS MADE TO UNITED ELECTRICAL CO. (P) LTD, VS. CIT (2002) 25 8 ITR 317 (DEL). ACCORDINGLY, IT IS SUBMITTED THAT THE INITIATION OF PROCEEDINGS FOR RE-OPENING OF ASSESSMENT U/S 147 AND ISSUANCE OF NOTICE U/S 148 A ND IN TURN, THE CONSEQUENT IMPUGNED-ASSESSMENT FRAMED UNDER S. 143(3)/147 ARE NOT TENABLE IN LAW AND DESERVES TO BE HELD AS NOT VALID AND BAD IN LAW.' 4. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE OBSERVED THAT IN THE REASONS RECORDED FOR REOPENING THE CASE, STATUS OF THE ASSESSEE HAD BEEN MENTIONED AS INDIVIDUAL AND IF IT WAS SO, THE PROCEEDINGS UNDER SECTION 147 OF THE ACT IN THE CAS E OF SHRI DINESH JAIN IN THE CAPACITY OF HUF COULD NOT HAVE BEEN INITIATED BECAUSE, IT WAS ON THE BASIS OF REASONS ONLY THAT NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED. LEARNED CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD MENTIONED THE REASONS THAT THE ASSESSEE HAD ENTERED INTO TRANSACTION OF RS.18,33,466/- WITH M/S. MAHASAGAR SECURITIES PVT. LTD. (NOW ALAG SECURITIES PVT. LTD.) IN THE FINANCIAL YEAR 2003-04 . THE LEARNED CIT(A) POINTED OUT THAT IN FACT, THE ASSESSEE HAD ACTUALLY ENTERED INTO TRANSACTION WITH M/S. GOLDSTAR FINVEST PVT. LTD. AN D NOT WITH M/S. MAHASAGAR SECURITIES PVT. LTD. BOMBAY AND THE ASSES SEE IN HIS RETURN OF 7 INCOME HAD ALREADY ENCLOSED THE SAID PURCHASE AND S ALE BILL OF M/S. GOLDSTAR FINVEST PVT. LTD. AND THE NAME OF THE BROK ING CONCERN APPEARS ON THE BILLS, SO, IT WAS APPARENTLY CLEAR BEFORE TH E ASSESSING OFFICER THAT THE ASSESSEE HAD NOT DEALT WITH M/S. MAHASAGAR SECU RITIES PVT. LTD. AND EVEN AS PER THE ASSESSMENT ORDER MADE, IT HAD NOT F OUND THAT THE ASSESSEE IN ANY MANNER DEALT WITH M/S. MAHASAGAR SE CURITIES PVT. LTD. LEARNED CIT(A) FURTHER OBSERVED THAT THE ASSESSEE THROUGHOUT CLAIMED TO HAVE DEALT WITH M/S. GOLDSTAR FINVEST PVT. LTD. ONL Y. SO, THE REASONS RECORDED THAT LONG TERM CAPITAL GAIN HAS ARISEN ON ACCOUNT OF DEALING WITH M/S. MAHASAGAR SECURITIES PVT. LTD., BOMBAY WAS NOT CORRECT AS THE ASSESSEE HAD NOT DEALT AT ALL WITH SUCH CONCERN. L EARNED CIT(A) HELD THAT THE VERY FOUNDATION OF FORMATION OF BELIEF WAS MISP LACED IN THE ASSESSEES CASE TO GIVE JURISDICTION TO THE ASSESSI NG OFFICER TO REOPEN THE CASE. SO, THE REOPENING OF THE ASSESSMENT COULD NO T BE SUSTAINED ON THIS ACCOUNT. LEARNED CIT(A) WAS OF THE VIEW THAT FOR T HE REOPENING OF THE ASSESSMENT, THE ASSESSING OFFICER SHOULD HAVE HAD R EASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT UND ER SECTION 147 OF THE ACT AND FOR THAT PURPOSE, HE HAD TO FOLLOW THE PROVISIONS OF SECTION 148 TO 153 OF THE ACT. THE PROVISIONS CONTAINED IN 148(2) OF THE ACT SPECIFICALLY MENTIONED THAT ASSESSING OFFICER BEFOR E ISSUING ANY NOTICE 8 UNDER THIS SECTION, SHALL RECORD REASONS FOR DOING SO AND ONLY THE REASONS RECORDED WOULD BE LOOKED FOR SUSTAINING AND SETTING ASIDE THE NOTICE UNDER SECTION 148 OF THE ACT. LEARNED CIT(A) OBSE RVED THAT THE PRINCIPLE IS WELL SETTLED ON THE QUESTION AS TO WHETHER THERE WERE REASONS TO BELIEVE WITHIN THE MEANING OF SECTION 147 OF THE AC T THAT INCOME HAD ESCAPED ASSESSMENT MUST BE DETERMINED WITH REFERENC E TO THE REASONS RECORDED BY THE ASSESSING OFFICER, BUT IN ASSESSEE S CASE, IT WAS APPARENTLY CLEAR THAT THE NOTICE ISSUED UNDER SECTI ON 148 OF THE ACT ON THE BASIS OF REASONS RECORDED UNDER SECTION 147 OF THE ACT WAS NOT SUSTAINABLE AND THE ASSESSMENT PROCEEDINGS ON THE B ASIS OF SUCH NOTICE WERE LIABLE TO BE SET ASIDE AND QUASHED. RELIANCE WAS PLACED ON THE FOLLOWING CASE-LAWS:- 1) N.D. BHATT, IAC OF IT VS. I.B.M. WORLD TRADE COR PORATION (1995) 216 ITR 811 (BOM.) 2) PRASHANT S. JOSHI VS. ITO (2010) 324 ITR 154 (BO M.) NOW, THE DEPARTMENT IS IN APPEAL. 5. LEARNED D.R. SUPPORTED THE ORDER OF ASSESSING OFFI CER WHILE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE 9 AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGN ED ORDER PASSED BY THE LEARNED CIT(A). 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER BY RECORDING THE REASONS. IT IS WELL SETTLED THAT FOR REOPENING OF THE ASSESSMENT, THE ASSESSING OFFICER SHOULD HAVE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT AND FOR THAT PURPOSE, HE IS REQUIRED TO FOLLOW THE PROCEDUR E CONTAINED IN SECTION 148 TO 153 OF THE ACT. AS PER THE PROVISIONS OF SE CTION 148(2) OF THE ACT, THE ASSESSING OFFICER FOR ISSUING NOTICE UNDER THIS SECTION SHALL RECORD THE REASONS FOR DOING SO. THE USE OF THE WORD SHALL MAKE IT MANDATORY FOR THE ASSESSING OFFICER TO RECORD THE REASONS FOR REO PENING THE ASSESSMENT AND THE REASONS RECORDED SHOULD NOT BE ARBITRARY AN D MUST BE BASED ON CERTAIN FACTUAL MATRIX TO DECIDE THE CONTROVERSY RE LATING TO REOPENING OF THE ASSESSMENT. THE PRINCIPLE OF LAW IS WELL SETTL ED THAT THE QUESTION AS TO WHETHER THERE WAS REASON TO BELIEVE WITHIN THE M EANING OF SECTION 147 OF THE ACT THAT INCOME WHICH HAS ESCAPED ASSESSMENT MUST BE DETERMINED WITH REFERENCE TO THE REASONS RECORDED B Y THE ASSESSING OFFICER. IN THE PRESENT CASE, THE ASSESSING OFFICE R RECORDED THE REASONS 10 AND THAT AS PER THE INFORMATION GATHERED, THE ASSES SEE HAS ENTERED INTO TRANSACTION WITH M/S. MAHASAGAR SECURITIES PVT. LTD ., BOMBAY AND THE SAID COMPANY WAS ENGAGED IN THE BUSINESS OF PROVIDI NG FRAUDULENT BILLS FOR BOGUS SPECULATION PROFIT/LOSS, SHORT TERM CAPITAL G AIN AND LONG TERM CAPITAL GAIN, COMMODITY PROFIT/LOSS ON COMMODITY TR ADING. ON, THE CONTRARY, THE ASSESSEE HAD NOT ENTERED INTO ANY TRA NSACTION WITH M/S. MAHASAGAR SECURITIES PVT. LTD. AND IN THE ORIGINAL RETURN OF INCOME, THE ASSESSEE HAD ENCLOSED THE PURCHASE AND SALE BILLS O F M/S. GOLDSTAR FINVEST PVT. LTD. WITH WHOM THE ASSESSEE ENTERED INTO TRANS ACTION AND EARNED THE LONG TERM CAPITAL GAIN, THOSE BILLS WERE AVAILABLE WITH THE ASSESSING OFFICER FOR SCRUTINY. HOWEVER, THE ASSESSING OFFIC ER RECORDED THE REASONS THAT ASSESSEE ENTERED INTO TRANSACTION THROUGH M/S. MAHASAGAR SECURITIES PVT. LTD. BOMBAY. THEREFORE, THE VERY BASIS OF REA SONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT W AS WRONG BECAUSE THE ASSESSEE DID NOT ENTER INTO ANY TRANSACTION TO GET THE PROFIT ON ACCOUNT OF LONG TERM CAPITAL GAIN WITH M/S. MAHASAGAR SECURIT IES PVT. LTD. BOMBAY RATHER THE TRANSACTION WAS ENTERED THROUGH M/S. GOL DSTAR FINVEST PVT. LTD, THEREFORE, THE BELIEF OF THE ASSESSING OFFICER THAT INCOME HAD ESCAPED ASSESSMENT WHICH WAS EARNED BY THE ASSESSEE ON THE TRANSACTIONS ENTERED INTO WITH M/S. MAHASAGAR SECURITIES PVT. LT D. BOMBAY WAS 11 INCORRECT. THEREFORE, IN OUR OPINION, THE LEARNED CIT(A) HAS RIGHTLY HELD THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER UND ER SECTION 148 OF THE ACT ON THE BASIS OF THE AFORESAID REASONS RECORDED UNDER SECTION 147 OF THE ACT WAS NOT SUSTAINABLE AND THE ASSESSMENT PROC EEDINGS ON THE BASIS OF SUCH NOTICE WERE RIGHTLY SET ASIDE AND QUASHED. WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND AS SUCH THERE IS NO MERIT IN THIS APPEAL OF THE DEPARTMENT. 7. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISS ED. (ORDER PRONOUNCED IN THE COURT ON 20 TH SEPTEMBER, 2013). (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH SEPTEMBER, 2013. 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.
