TaxTMI 
TaxTMI 
2018 (8) TMI 1066
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....g of that notice. 2. Briefly, the case relates to assessment for AY 2004-05; the assessee had filed his original return of income on 25/10/2004 declaring Rs. 18,00,16,650/- including income of Rs. 60,00,000/- chargeable at normal rates and the balance from long term capital gains. The income from capital gain was further divided: into two parts, i.e., one from sale of units of various mutual funds-(36 in: 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....
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.... share transfer form. The sale of shares has not been carried out through a recognized stock exchange. The following table provides the details relating to the sale of shares of M/s Parsec Technologies Ltd." The AO proceeded to record that the assessee had acquired Rs. 10/- face value 3,84,500 shares of Parsec Technologies ("Parsec") at a premium of Rs. 130/- per share and later another 46500 shares for Rs. 10 (without any premium) from one Ravi Sikka. He then sold (on 26.3.2004) 4,00,000 shares to his father M.M. Agarwal at Rs. 25/- per share and declared a loss. This transaction, according to the AO was not genuine and was a device to avoid tax, to claim loss that was not warranted. The AO also reasoned that this share transaction was sh....
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.... 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 were not furnished to the petitioner till 11.11.2008 despite....
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....d are untenable. In fact, that share transfer form was furnished by the petitioner in pursuance to a notice dated 10.01.2008 (Pg. 101). Counsel submits that it is evident that in the absence of share transfer form before the AO. Till 25.03.2008, the assertion in the reasons to believe shows reasons to believe have been anti-dated. 6. It is further stated that in the reasons recorded the date of purchase of share has been mentioned as 27.02.2001 (page 187) whereas in the return, date of purchase was incorrectly stated as 27.12.2001. This date i.e. 27.02.2001 was provided by the petitioner only to the AO on 21.04.2008 (page 129 of the writ petition@ Pg. 127) and as such date of purchase as 27.02.2001 was not available to the AO till 21.04.20....
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.... on the file, before the notice was issued, is disputed. 9. A plain look at the documents and file notings produced by the revenue in the digital form on 02.04.2018, it is discernable that the reasons which it claims were to be recorded on 28.05.2007 do not seem to have been so recorded on that date, i.e. 28.05.2007, but were recorded subsequently, much later. This is evident from the ensuing facts. The "reasons to believe" state, inter alia, as under: "The return was processed u/s 143(1) of the Act on 31.03.2006. Subsequently. Refunds of Rs. 91,41,462/- and of Rs. 3,26,480/- were issued to the assessee after passing the orders under Section 154 of the Income Tax Act." 10. The refund of Rs. 91,41,462/- and Rs. 3,26,4801- were issued on 3....
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....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. ....