2022 (4) TMI 1396

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..... Petitioner thereafter received a notice dated 11th November, 2016 under Section 142(1) of the Act, calling upon Petitioner to produce the accounts and documents mentioned therein. One item which is relevant to the Petition at hand is at serial No.8 in the said notice and it reads, "details of capital gains/losses with supportives". By a letter dated 2nd December, 2016, Petitioner filed a response to the notice and provided details of capital gains/losses and also enclosed copy of client trade report issued by the broker. In these documents to which Mr. Thakkar took us through, Petitioner has disclosed the purchase and sale of shares in Finalysis Credit and Guarantee Company Ltd. (Finalysis). Prior to the notice dated 11th November, 2016, ....

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....have been carried out by SEBI on Finalysis. The reasons also mentioned that statements of directors of Finalysis have been recorded and they have admitted that the Company was a paper company. Investigation revealed that Petitioner had sold shares of Finalysis worth Rs.29,43,148/- during the relevant assessment year and therefore, assessment of the said transactions has escaped assessment. As per the reasons, admittedly Petitioner has disclosed during the assessment proceedings and it is seen that Petitioner has claimed long term capital gain at 10% of Rs.29,43,148/-. Thus, information received by the DDIT (Inv) has live link with the financials of Petitioner. We have to emphasize that in the reasons itself Respondents admit that Petitioner....

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....mmenced on Finalysis much before the assessment order in Petitioner's case was passed and the search action under Section 132(1) of the Act on Petitioner was also in furtherance to the investigation being carried out on Finalysis. The entire basis of Respondents' case is that in 2020 Respondent No.1 got information that Finalysis was a paper company or a penny stock company based on certain investigations. Mr. Suresh Kumar submitted that it came to light during the investigation that Petitioner also had traded in the scrip of Finalysis during A.Y. 2013-2014 and therefore, Respondent was entitled to re-open. Mr. Suresh Kumar submitted that revenue has to go to the root of the matter and take action against those involved in this price riggin....