TaxTMI 
TaxTMI 
2016 (1) TMI 946
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....essment Year 2010-11. 2. Brief facts are as under. For the assessment year 2010-11 the petitioner had filed its return of income on 22.07.2010 declaring loss of Rs. 2.69 lacs (rounded off). Such return was accepted without scrutiny. Thus, no scrutiny assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' for short) came to be framed in that case. 3. The Assessing Officer, in order to re-open such assessment, issued the impugned notice dated 24.02.2015 at the request of the petitioner. He also supplied reasons recoded by him for issuing notice. Such reasons read read as under: " .. .. It is seen that the assessee has transferred 5,30,410 shares during year under consideration whose market value on the date of tran....
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....section 143(1) of the Act without scrutiny. There was no opinion formed by the Assessing Officer on the tax liability of the income in question as held by the Supreme Court in case of Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd., reported in 291 ITR 500 (SC). It is not necessary at this stage for the Assessing Officer to establish conclusively that the income chargeable to tax has escaped assessment. Counsel also relied on decision of this Court in case of Inductotherm (India) P. Ltd. Vs. M. Gopalan, Deputy Commissioner of Income Tax, reported in 356 ITR 481 (Guj.) in this context. Counsel also relied on the decision of the Supreme Court in case of Deputy Commissioner of Income Tax and another Vs. Zuari Esta....
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....the Supreme Cort in the case of Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd. (supra). It is on this ground that the Supreme Court had in the case of Deputy Commissioner of Income Tax and another Vs. Zuari Estate Development and Investment Company Ltd. (supra) reversed the judgment of the High Court. However, even in the case of assessment previously framed without scrutiny which is sought to be reopened by issuance of notice under section 148 of the Act, the principle requirement that the Assessing Officer has reason to believe that the income chargeable to tax had escaped assessment would still survive. Of course, this formation of belief by the Assessing Officer must be prima facie and at the stage when th....
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....n assessment which was previously accepted under section 143(1) of the Act without scrutiny, the Assessing Officer would have power to reopen the assessment, provided he had some tangible material on the basis of which he could form a reason to believe that income chargeable to tax had escaped assessment. However, as held by the Apex Court in the case of Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd., (supra) and several other decisions, such reason to believe need not necessarily be a firm final decision of the Assessing Officer. 17. If we accept such proposition, the petitioner's apprehension that the Assessing Officer would arbitrarily exercise powers under section 147 of the Act to circumvent the scru....
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....income chargeable to tax had escaped assessment. 11. Quite apart from this, even on greater scrutiny of the statutory provisions, we find that the transaction in question did not invite any tax liability on the petitioner. Section 45 of the Act, as is well known, pertains to capital gains. Subsection (1) thereof in particular provides for charging of tax on any profit or gain from transfer of capital assets as deemed income of the assessee for the previous year in which transfer took place. Section 47 of the Act pertains to transaction not regarded as transfer. Subclause (iii), which is relevant for our purpose reads as under: "47. Nothing contained in section 45 shall apply to the following transfers :- (i) xxx xxx (ii) xxx xxx (i....
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....of section 45 of the Act pertaining to capital gain would not apply. 12. An attempt was made by the Assessing Officer to apply further to proviso to section 48 of the Act. Section 48 of the Act pertains to mode of computation. It essentially provides that the income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely, expenditure incurred wholly and exclusively in connection with such transfer, and the cost of acquisition of the asset and the cost of any improvement. Further proviso to section 48 of the Act which the respondents want to press into service reads as under: "Provi....