TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 456
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....nder Sec. 147 r.w.s 143(3) of the Act, dated 01.12.2018 for assessment year 2011-12. Before us the assessee has assailed the impugned order on the following grounds of appeal : "1. Based on the facts and circumstances of the case, order passed by the Learned PCIT-II, Nagpur is bad in law and needs to be set aside. 2. Based on the facts and circumstances of the case and in law, the assessment order passed by the ACIT-Wardha Range, Wardha is neither erroneous nor pre- judicial to the interest of the revenue as the reassessment order u/s. 147 of the I.T. Act, 1961 was passed after the verification of reasons recorded for re-opening of assessment and hence, there is no situation which of invoking provisions of section 263 of the I.T Act, 19....
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.... u/s. 147 r.w.s 143(3) of the Act, dated 01.12.2018 accepted his returned income and did not make any addition as regards the issue on the basis of which his case was reopened by him. 3. After culmination of the reassessment proceedings the Pr. CIT called for the records of the assessee. Observing, that the Assessing Officer in the course of assessment proceedings had not verified the details of purchase and sale of shares, numbers of shares, copy of demat account which would have revealed the date on which shares were received by the assessee in his de-mat account, as well as not examined as to whether or not the assessee had regular dealings with the broker and the source of purchase of shares in question etc., the Pr. CIT was of the vie....
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....dered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. As is discernible from the records, the case of the assessee was reopened by the Assessing Officer u/s. 147 of the Act on the basis of the following 'reasons to believe' (as were made available to the assessee by the AO vide an annexure to his Notice u/s 142(1), dated 12.10.2018), which reads as under (relevant extract) : "You have shown Long Term Capital Gain in penny stock of M/s. Comfort Intech Ltd by showing sale of 1,00,000 shares for Rs. 14,75,000/- which is not based on real investment practice." 6. As observed by us hereinabove, the assessee in his reply had submitted before the Assessing Officer that he had n....
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....e course of the assessment proceedings, the assessee had not claimed any exempt LTCG of Rs. 14.75 lac (supra) on sale of shares of M/s. Comfort Intech Ltd., but on the contrary it had disclosed STCG of Rs. 10,69,635/- (supra) on the sale of shares of the said scrip and had offered the same for tax in his return of income. 8. Backed by the aforesaid factual position there is no gainsaying that the very basis for reopening the case of the assessee i.e., booking of bogus exempt LTCG of Rs. 14.75 lac (supra) on sale of one lac shares of M/s Comfort Intech Ltd. is not only incorrect, but in the true sense can safely be held as non-existent. Observing, that the "reason to believe" on the basis of which the case of the assessee was reopened was f....
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....hich shares were received by the assessee; as to whether the transaction in question was the only one transaction; as to how the shares offered vide right issues were purchased from the broker; a/w necessary verifications as regards the source of the purchases etc. had rendered the assessment order passed by him u/s. 143(3) r.w.s.147 of the Act, dated 01.12.2018 as erroneous in so far it was prejudicial to the interest of the revenue, we are afraid the same cannot be accepted. We, say so, for the reason that now when the very basis for reopening of the assessee's case under Sec. 147 of the Act is admittedly found to be incorrect or, in fact non-existent, then, the said fact would continue to remain so qua the jurisdiction assumed by the Pr.....