TaxTMI 
TaxTMI 
2017 (8) TMI 1309
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....0.11.2010 has framed following substantial questions of law which reads as under:- (i) "Whether in the facts and circumstances of case the ITAT was justified in law in holding the share loss claimed by the assessee as genuine in spite of the fact that numerous discrepancies were pointed out by the AO and the broker itself admitted to have provided accommodation entries? (ii) Whether in the facts and circumstance of case the ITAT was justified in law in not upholding the sale of 33000 share as speculative transactions as the assessee itself admitted that no delivery was taken for the said transactions?" 3. On 25.04.2017, when the matter was argued, we were of the opinion that the issue is covered by the decision of Supre....
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....ove that the agreements were made in Gwalior. Now, the facts found by the Income-tax authorities are these : The three brokers in whose names the contracts stood were, having regard to their means, not likely to have been thought of for contracts of the magnitude which we have. They had not done business in cotton futures prior to the present contracts nor subsequent thereto. They had no bank accounts and large amounts to the tune of Rs. 30 lakhs are supposed to have been paid to them in cash by J. R. Pillani, Gwalior, and turned over by them in cash to the appellant. They produced no accounts for their dealings and the ankdas produced by them at a late stage were found to have been freshly written up. When Durgaprasad Mandalia, the manager....
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....e taxation. No exception can be taken to that statement. Every person is entitled so to arrange his affairs as to avoid taxation but the arrangement must be real and genuine and not a sham or makebelieve, and the question now under consideration is whether the contracts with the brokers were genuine. 12. Turning next to the accounts produced by theappellant, it is seen that the transactions of the three brokers were entered in Kherij Khata, which is said to have been maintained for parties for whom there are small dealings and whose accounts are cleared up in short time. But then, these transactions are not small transactions, nor were they close in a short time. Though the dealings went on for several months and there were several....
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....d be taken, that had not been done and that was a serious irregularity. The portion of the order of remand relevant for the present purpose is as follows : "The managing director of the assessee company or rather the person responsible for ordering these transactions on behalf of the assessee company should also be similarly examined." 15. Now, the obvious intention behind this order, readas a whole, was that persons connected with the several links in the chain of contracts and series of payments concerned in these transaction should be examined with a view to elucidate the true position, and the managing director was mentioned as the person who was likely to have entered into these transactions. Durgaprasad Mandalia was ....
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.... (c) The case should not be one of a mere change ofopinion by the Assessing Officer or the drawing of a different inference from the same facts but that those reasons must be based on facts which have subsequently come into possession of the Assessing Officer. (d) The sufficiency of reasons for forming the belief isnot for the Court to judge although the assessed can contend that the belief was not bona fide or was based on vague, irrelevant and non-specific information or that the material did not have any rational connection or a live link for the formation of the requisite belief. This is what the Supreme Court said: From a combined review of the judgments of this Court, it follows that an Income-tax Officer....
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....the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. 12. This Court also had occasion to deal with the issueof reopening a completed assessment in United Electrical Co. P. Ltd. v. Commissioner of Income-tax and Ors. (2002) 258 ITR 317. This decision has been relied upon by the Tribunal but we find that it is clearly distinguishable because in that case the Division Bench came to the conclusion that the statement on the basis of which reopening was sought was too general and it did not mention any name, much less the name of the assessed. It was, therefore, held that there was no inf....