2018 (2) TMI 1218

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...., the petitioner had filed the return of income. On 22.07.2010, such return was accepted without scrutiny. To reopen such assessment, impugned notice came to be issued. The Assessing Officer had recorded following reasons before issuing the notice: "In this case the information has been received that during the year under consideration the assessee has transferred 3,96,000 shares whose market value on the date of transfer was Rs. 5,69,52,000/without consideration to M/s.Nerka Chemicals Pvt. Ltd. by way of transfer deed dated 26.02.2010. However, on verification for return of income it is noticed that the assessee has not shown this transaction in his return of income. Further the assessee has not shown the Capital Gain in his retur....

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....ason to believe that income chargeable to tax has escaped assessment. In this context, the question of validity of the reason demonstrating formation of belief by the Assessing Officer becomes relevant. 7. Under identical circumstances, this Court had occasion to examine the validity of notice for reopening in case of one M/s.Prakriya Pharmachem thru Its current partner & others v. Income Tax Officer Ward 7 passed in Special Civil Application No.20492 of 2015. Such petition was allowed by the judgment dated 18.01.2016, making following observations: "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....

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.... apply to the present case, since it applies to any transfer under gift or irrevocable trust under capital asset in the nature of shares, debentures or warrants allotted by a company to its employees under Employees' Stock Option Plan or Scheme. Admittedly, this is not such a case. This proviso is in the nature of exclusion to main provisions of sub-clause (iii) of section 47 of the Act. Under the circumstances, the case on hand would be governed by the main body of sub-clause (iii) of section 47 of the Act and consequently, the provision 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 Ac....