TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1597
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....vestment of Rs. 5,20,000/- in R.E.C. Bonds, being eligible Bonds. 4. The ld. CIT(A) has erred in law as well as on facts of the case by confirming addition made by the ld. A.O. by disallowing exemption U/s 54F of the I.T. Act, 1961 amounting to Rs. 1,22,790/-. The appellant craves leave to add, amend, alter, delete or modify any of the above grounds of appeal before or at the time of hearing." 2. Ground No. 1 of the appeal is regarding validity of reopening of the assessment. The assessee filed return of income for the year under consideration on 31/10/2005 declaring total income of Rs. 1,40,370/-, which was processed U/s 143(1) of the Income Tax Act, 1961 (in short the Act) and subsequently the assessment was completed U/s 143(3) read with Section 147 of the Act on 25/08/2009 on the returned income. In the original return filed, the assessee had declared long term capital gain on sale of shares at Rs. 5,11,026/- and claimed exemption U/s 54EC of the Act as the assessee invested Rs. 5,20,000/- in REC Bonds. Subsequently, as per the information received by the Assessing Officer, it was found that the assessee earned capital gain on sale of 7300 shares of M/s Talent Infoway L....
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....sary for his assessment at the time of original assessment and therefore, there was no failure on the part of the assessee in disclosing the details of share transaction entered into by him. The notice U/s 148 of the Act was issued on 19/3/2012, which is after expiry of four years from the end of the assessment year, therefore, the reassessment proceedings has been initiated on the basis of shares of M/s Talent Infoway Ltd. treating it as bogus transaction without making out a case that there is failure on the part of the assessee to disclose fully and truly all relevant material necessary for assessment. Hence, the ld AR has submitted that the reopening is not valid and without jurisdiction as the condition stipulated in the proviso to Section 147 of the Act was not satisfied that the Assessing Officer was having reasons to believe such escapement has occurred by the reason of either of failure on the part of the assessee to disclose fully and truly all relevant material facts necessary for his assessment. In support of his contention, he has relied upon the decision of the Hon'ble Allahabad High Court in the case of J.P. Bajpai (HUF) Vs CIT (2004) 140 Taxmann 34 (All) and submitt....
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....itted that the statement of Mukesh M. Choksi recorded during the search on 25/11/2009 is a tangible material for the Assessing Officer to form the reasons to believe that the income claimed as long term capital gain is assessable to tax but has escaped assessment. He has relied upon the orders of the authorities below. 6. We have considered the rival submissions as well as the relevant material on record. There is no dispute that this is the second reopening of the assessment as the first reassessment was completed by the Assessing Officer vide order dated 25/8/2009 on the issue of source of investment in the shares of NTPC and TCS. It is also not in dispute that the second reopening was initiated vide notice dated 19/3/2012 is after four years from the end of the assessment year under consideration. The Assessing Officer has reopened the assessment second time by recording the reasons as under: "Reason for initiating proceedings u/s 148 of the I. T. Act. 1961 Date 19.03.2012 As per information received it is noted that Search and seizure action U/s 132 of the Income Tax Act was undertaken in the case of M/s Mahasagar Securities Private Limited on 25.11.2009. During the co....
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....ice if the AO has reason to believe that income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee (a) to make a return under s. 139 or (b) in response to a notice issued under sub-s. (1) of s. 142 or s. 148 or (c) to disclose fully and truly all material facts necessary for that assessment year. Since the first two conditions are not pleaded by the respondents, it is the submission of the petitioner that the notice is wholly unwarranted and invalid since there is no allegation whatsoever that the petitioner has failed to disclose all material facts necessary for assessment. This submission can be considered only with reference to the reasons put forth by the respondents for issuing the notice. The letter dt. 27th Jan., 2005, inter alia, states that the AO has reasons to believe that income has escaped assessment because the petitioner has wrongly claimed deduction under s. 80-IA in respect of income which was not derived from the income of the petitioner's unit of Kundaim. Further, that longterm capital gains have been wrongly claimed by the assessee which have been wrongly considered for the set off of the unit of Kundaim which has r....