TaxTMI 
TaxTMI 
2016 (9) TMI 1007
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....was scrutinized and assessment under section 153A, read with section 143(3) of the Income Tax Act, 1961 ('the Act' for short) was framed. To reopen such assessment, the Assessing Officer issued the impugned notice, which as can be seen, was done beyond a period of four years from the end of relevant assessment year. To do so, the Assessing Officer had recorded following reasons: " In this case, the assessment have been made u/s.153A r.w.s. 143(3) of the Act of Rs. 10,22,82,910/- as against the returned income of Rs. 2,780/- show by the assessee on 31.12.2007. The Assessing Officer has disallowed a loss of Rs. 9,36,93,513/- being loss booked in "off market transaction" and Rs. 85,86,619/- disallowed u/s. 14A of the Act. On g....
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....rket, was examined by this Court in case of this very assessee in the judgment reported in case of Commissioner of Incometax, AhmedabadIII v. Prudent Finance (P.) Ltd. reported in [2014] 43 taxmann.com 317 (Gujarat). The Court found that disallowance of such loss was not correct. 3. On the other hand, learned counsel Shri Nitin Mehta submitted that the assessee had not disclosed that M/s.Nitin Parikh and Co. and petitioner were sister concerns. The loss on off market transaction with this company to the tune of Rs. 8.26 crores (rounded off) was required to be disallowed as it was done in case of other group concerns. 4. From the reasons recorded by the Assessing Officer for issuing notice for reopening, one can gather that the sole gr....
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.... as under: "5. The assessee company is engaged in the business of trading in shares, securities and mutual funds. The group is headed by Shri Nitin Bhanukant Parikh, who is being assisted in this business by Shri Jolit Jaswantlal Shah, Smt. Heena Nitin Parikh and Smt. Amita Jolit Shah. Assessee M/s. Prudent Finance P Ltd is flagship concern of the group. The various concerns which are in the fold of this group are as under: Sr. No. Name of the concern Status Director/partner/propr ietor 4 Nitin Parikh & Co. Proprietary Concern Shri Nitin Bhanukant Parikh 6. In para 6, he addressed the issue of "Loss in off market transactions:Rs.9,37,13,513/- " which represented the assessee's transaction th....
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.... from it and not profit through assessee as stated by your goodselves. (The copy of Profit & Loss account for relevant year is enclosed herewith as Annexure 2). As the purchase and sale transaction carried out with aforesaid firm is the market transactions and routed through stock exchange and similar to transaction with Kotak Securities Limited, same cannot be considered as offline transaction carried out by assessee. In view of such facts, loss considered by your goodselves in proposed disallowance for A.Y. 20042005 is required to be reduced by Rs. 8,26,92,608." 8. It was only after such elaborate exercise that the Assessing Officer dropped his objection to the loss of Rs. 8.26 crores in the transactions between the assesses a....