TaxTMI 
TaxTMI 
2016 (7) TMI 1599
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.... ld. CIT(A) was not justified, while re-computing the long term capital gain on sale of flat, in disallowing the assessee's following claims: a) Rs. 10,000/- towards expenses on transfer. b) Rs. 52560/- + Rs. 4431/- Rs. 300233/- as further indexed, towards improvement of flat. 5. That the ld. CIT(A) was wholly unjustified in directing the ITO to reopen the case for AY 2004-05, of his own, to assess the capital gain on protective basis. 6. That by any reckoning, the ld. CIT(A) was not competent to issue such directions, to reopen the case for another year, after himself having held that the capital gain was taxable in this year. Such directions are wholly, illegal, arbitrary and uncalled for. 7. That the initiation of penalty proceedings by the ld. CIT(A), for the alleged concealment of long term capital gain, is illegal more so, when he himself, placed in doubt by directing its assessment in AY 2004-05." 2. The facts as culled out from the records are that the assessee, who earned business income being interest as a partner in the partnership firms, namely, M/s. Bawa Murayama and M/s. Bawa Macleran and had also earned income by way of....
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.... bank, at times, the transactions are made by way of switch out/switch in by the portfolio manager, of the existing securities from one head to the other, and also by re-investment of dividend without involving fresh flow of funds from the bank account of the assessee. The assessee further submitted that the assessee had already declared the short term capital gain/loss in her return of income on Mutual Funds/Securities which had been sold during the year under consideration. To support her contention, the assessee also furnished a copy of return for the year under consideration, filed by her on 31.03.2006 along with computation of income chart, in which, details of short term capital gain/loss were disclosed. As the investment in Mutual funds/Securities was routed through bank account(s), the assessee was asked by the Assessing Officer to explain the sources of various credit entries in her various bank accounts maintained by the assessee with various banks. In response thereto, the assessee, vide reply dated 03.01.2013, had informed that the following bank accounts were being maintained by her in different banks:- A) Account No. 051-199974-006 & 129-015301-06 with HSBC, ....
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....13 was the last working day of the F.Y. 2012-13 and the assessment was to be completed on 28.03.2013 itself. After considering all the replies, the Assessing Officer found that the assessee had failed to file any explanation with regard to following credits, inspite of various opportunities provided to her:- Sr..No. Bank Name with Account No. Date Amount 1. HSBC 129-015301-006 27.05.2004 Rs. 22,000/- 2. HSBC 051-199974-006 27.05.2004 Rs. 5,95,272/- 3. HSBC 051-199974-006 07.07.2004 Rs. 8,00,000/- 4. HSBC 129-015301-006 12.07.2004 Rs. 4,49,300/- 5. HSBC 129-015301-006 12.07.2004 Rs. 9,00,000/- 6. HSBC 129-015301-006 28.07.2004 Rs. 25,000/- 7. HSBC 051-199974-006 25.01.2005 Rs. 25,000/- HSBC 129-015301-006 09.02.2005 Rs. 19,723/- Total: Rs. 28,36,295/- As the assessee failed to file any explanation with regard to the source of the above deposits and asked more time to explain these deposits, which was denied, the Assessing Officer treated these deposits from unexplained sources and made an addition of Rs. ....
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....iled by assessee and also no balance sheet was annexed alongwith the return filed; that it is an undisputed fact on record that but for the AIR information, there was no other material with the AO to reach the requisite satisfaction u/s 148(2); that in the reasons recorded, the AO has noted that entries of Rs. 1,09,49,156/- were disclosed as per the AIR information' that then, by referring to the return filed, she said that the source of investment in shares/Mutual funds were not disclosed in the return filed; that this purportedly lead her to believe that the said income of Rs. 1,09,49,156/- had escaped assessment; that the above reasons are no reasons in the eye of law, inasmuch as the same are most speculative and vague in nature; that the source of investment, yet to be verified and explained, cannot be held as income escaping assessment for the purpose of section 148.; that obviously, for such verification, the legislature has empowered the AO to assume normal jurisdiction under section 143(2), after the return is filed.; that it is only during such assessment proceedings, that the source can be questioned, and deemed to be income u/s.68/69, if no satisfactory explanation is o....
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....he basis of AIR information was illegal inasmuch as it was simplify in the domain of suspicion and for verification of the source of investment made in Mutual funds, which is impermissible u/s 148. Section 148 does not permit verification, as rightly contended, as the same falls in the domain of section 143(2), after the return is filed. It is an undisputed fact on the record, that but for the AIR information, there was no other material with the AO to reach the requisite satisfaction u/s 148(2). In the reasons recorded, the AO has noted that entries of Rs. 1,09,49,156/- were disclosed as per the AIR information. Then by referring to the return filed, she said that the source of investment in shares/Mutual funds were not disclosed in the return filed. This purportedly lead her to believe that the said income of Rs. 1,09,49,156/- had escaped assessment. 8. The above reasons are no reasons in the eyes of law, inasmuch as the source of investment is yet to be verified and explained, and it cannot be held as income escaping assessment for the purposes of section 148. For such a verification, the AO is to assume normal jurisdiction under section 143(2), after the return is filed. It ....