TaxTMI 
TaxTMI 
2018 (8) TMI 1066
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....n: number) and second from sale of bonus shares' of M/s Terra Network SA, USA. The sale of shares of Terra Nova SA resulted in long term capital gain of Rs. 18,50,96,372/- but after claiming losses and B/F losses the net income offered to tax was Rs. 6,84,31,075/-. The losses claimed were in respect of two transactions; sale of shares of M/s Parsec Technology and on account of sale of mutual fund units. 3. On 25th May, 2007, the AO issued the impugned notice, proposing to reassess the petitioner's income. After repeated requests, the "reasons to believe" recorded by the AO were furnished to the assessee; they inter alia, read as follows: "2. In the original return filed by the assessee. Long term capital gain of Rs. 22,76,27,481/- have been shown. Short term capital loss of Rs. 5,36,59,621/- has also been shown inthe return. From the annexures enclosed with the return of income. It is seen that during the year the assessee has shown capital gains on sale of shares. Capital gains of Rs. 18,50,96,372/- have been shown on the sale of shares of M/s Terra Networks SA, USA. At the same time the assessee has also shown capital loss of Rs. 4,53,69,983/- on the sale of shares of M....
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....re was enough material before the AO on the basis of which, he could form a belief that the income chargeable to tax had escaped assessment in the assessee's case. It is stated that no assessment order had been passed in the present case. It was only the intimation issued under Section 143(l)(a) of the Act, regarding whatever was returned by the assessee; that had been accepted by the Assessing Officer. It was only on the perusal of documents annexed by the assessee along with the return, it came to know that the transactions of sales of shares of M/s Parsec entered into by the assessee were not genuine and that the loss claimed on sale of mutual fund was excessive and was hit by provisions of Section 94(7) of the Act. Accordingly, AO correctly initiated proceedings under Section 147 of the Act. It is emphasized that the proceeding had been initiated within 04 years from the end of relevant assessment year and that the no infirmity could be found with it. 5. Mr. C.S. Agarwal, learned senior counsel for the petitioner argued that the revenue's argument that reasons been recorded on 28.5.2007 then there does not appear to be any reason, that why were those alleged reasons recorded....
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....urged that the fact that shares were sold to Shri Madan Mohan Aggarwal could alone be known from share transfer form which had been filed by the petitioner only on 25.03.2008 (Pg. 120) (On the official record @ Pg. 199) and as such on 28.05.2007, this fact could not have been recorded, which corroborates that the reasons to believe were ante dated. Counsel relied on CIT vs. Ved & Co302 ITR 328 that a clandestine or back door entry to section 148.Counsel also relies on the orders of this court, made on 29 October, 2017, requiring the revenue to file affidavit in respect of the petitioner's argument with regard to ante dating of the reasons recorded, as well as order of 17 January, 2018 specifically asking for an affidavit on the subject. 7. The revenue had filed the digital record of the relevant assessment file, to substantiate that the "reasons to believe" were recorded in this case, before issuance of the reassessment notice and that there was no infirmity with the impugned notice. 8. This court has considered the record. The reassessment notice is based on reasons, which the revenue asserts, was recorded on 28 May, 2007. The question is whether the assessee is correct in a....
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....ons to justify such reassessment notice, before it was issued, given that it is a mandatory requirement under section 148(2) of the Act. 12. The petitioner also highlights that other similar documents placed in the digital form show that new numbers were assigned to the old page numbers in order to manipulate the placement of the documents. If initial (old) numbers are reckoned, it would be seen that reasons had not been recorded before the issue of the notice on 28.05.2007 and were recorded only after 5 November 2008, when the same were handed over to the petitioner on 11.11.2008 and not before despite repeated request. The petitioner also highlights that the copy of reasons recorded appears at pages 653 - 654 which is in "Aria1 Font" (original pages were 213 -214); whereas the documents of the same date (see Pg. 655 and 657) is in "Times New Roman Font", which shows "Arial Font" was not available. Also, the asssessee points out that the pages/file notes prior to original page 213 are documents which had been filed by the petitioner before the AO in the course of proceedings initiated by him under section 148 of the Act and these also establish that such reasons had not been re....