2020 (9) TMI 428

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....conducted at the premises of the assessee on 22.03.2012 and the assessment was framed u/s. 153 A of the Act vide order dated 28.02.2014. 6. On 31.03.2016 notice u/.s. 148 of the Act was issued and served upon the assessee. The reasons for reopening the assessment read as under:-   7. A perusal of the above show that the completed assessment was reopened on the basis of the information received from the Investigation Wing, Kolkata by which the AO came to know that some brokers have affirmed that they were providing accommodation entries in the form of long term capital gain and one of the such scrip was Nouvea Multimedia. The AO was of the opinion that since the assessee has also dealt in the said company the LTCG of Rs. 76.73 lacs is nothing but accommodation entry received by the assessee in lieu of his unaccounted cash introduced in his accounts as LTCG. 8. On the strength of this information the AO reopened the assessment and completed proceedings by making addition of Rs. 76.73 lacs. 9. At the very outset and as mentioned elsewhere we have to state that a search was contended at the premises of the assessee on 22.03.2012 and pursuant to the notice u/s. 153 A....

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....lict between the provisions of Chapter XIV-B of the Act and other provisions of the Act. This becomes clear from the extracted portion wherein emphasis has been supplied. To put it differently, in a situation where there is a conflict between the provisions of block assessment procedure prescribed under Chapter XIV-B of the Act and other provisions of the Act. it will be the special procedure prescribed under Chapter XIV-B of the Act which has to prevail. As already noticed hereinbefore. the entire scheme under Chapter XIV of the Act more particularly from Sections 147 to 153 of the Act pertaining to reassessment. and the special procedure for assessing the undisclosed income of the block period under Chapter XIV-B of the Act are not only separate and distinct from each other. but if an effort is made to incorporate the scheme under Chapter XIV of the Act for the purpose of assessment of the block period there is a conflict between the provisions which becomes apparent on a plain reading. In the circumstances. as per the established rules of interpretation. unless and until a plain reading of the two streams of assessment procedure does not result in the procedures being i....

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....ded that the assessee has not disclosed LTCG made through penny stock amounting to Rs. 76.70 lacs for the year under consideration. Accordingly in LTCG of Rs. 76.73 lacs is added to the income of the assessee. 17. This observation of the AO clearly show that there was no application of mind while issuing of notice u/s. 148 of the Act in as much as had he gone through the assessment records of the assessee he would have seen the computation of income filed with original return income and also with the return of income tax in response to notice u/s. 153 A of the Act. If he had done this exercise he would have known that LTCG has not only been disclosed in the return of income but the same was also claimed to be exempt. 18. In our considered view the proceedings has been initiated on the basis of no material less any tangible and relevant material and as such reasons recorded do not constitute valid reasons. Moreover the reopening is only on the basis of borrowed satisfaction and as mentioned elsewhere reasons are factually incorrect and the conclusion drawn by the AO in the assessment is contradictory. 19. Considering the facts of the case discussed elsewhere in the light of....

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....ntry of bogus LOSS. Penny, stocks are those stocks which trade at very low price and whose market capitalization is very low. The low price of the penny stocks makes manipulation of the share price very easy. 3. From the perusal of the information data, it is observed that Sh. Ishwar Chand Mittal (PAN: AANPC8865A) is one of the beneficiaries, who booked bogus long term capital gain. The detail of such transaction is annexed and is part of the satisfaction note. 4. From the transaction given in the sheet attached, it is observed Sh. Ishwar Chand Mittal has sold out 50000 scrips of "NOUVEA MULTI" for Rs. 7673000 in FY 2010-11 to different parties. In the Script NOUVEAU GLOBAL VENTURES LTD total trade of Rs. 203,87,23,071/- have been done in the annexed transaction details. From the perusal, it is evident that most of the purchases are on abnormally higher rates and were done by identified paper Jamakharchi companies controlled by entry operators, most of them on oath admitted to have engaged in providing entries. 5. I have examined the details provided by the Investigation Directorate of Kolkata, details available in the ITD systems ....