TaxTMI 
TaxTMI 
2023 (8) TMI 1344
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....g Counsel Mr. Varun K. Patel waives service of notice of rule for and on behalf of the respondent. 2. By this petition, under Article 226 of the Constitution of India, the petitioner has challenged a notice dated 20th March, 2021 issued under Section 148 of the Income Tax Act, 1961 (for short 'the Act, 1961') for Assessment Year 2017-18. 3.1. The petitioner is a Co-operative Society duly registered under the Gujarat Cooperative Societies Act, 1961 having Registration No. 11789 dated 29.05.1972 and is engaged in a business of banking and allied activities under the license issued by the Reserve Bank of India under the provisions of Banking Regulation Act, 1949. 3.2. The petitioner filed its return of income for Assessment Year 2017-18 on ....
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....consideration, it is found that the assessee has credited Rs. 2,11,76,500/- under the head Profit on sale of securities. Out of this, the assessee declared as short term capital gains of Rs. 1,29,01,250/- and paid tax @ 30% and remaining amount of Rs. 82,75,250/-taken a long-term capital gain (LTCG) and the assessee calculated LTCG considering index value of investment and offered income of Rs. 24,82,750 and paid tax of Rs. 2,48,275 (@ 10%), It is seen that the assesses had treated LTCG from sale Government bonds were treated as capital gain. Since these investments were made by the bank as a part of their business activities, gains from such activities are to be treated as business income. This was also clarified by Circular No. 665 of ....
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....ated 5.10.1993. This has resulted in escaped assessment of Rs. 82,75,250/- under business income." 3.8. The petitioner filed objections to the aforesaid reasons on 14th July, 2021. The respondent passed an order dated 25th October, 2021 rejecting the objections raised by the petitioner. Feeling aggrieved and dissatisfied with the impugned notice issued under Section 148 of the Act, 1961 and the order dated 25th October, 2021 rejecting the objections raised by the petitioner, the petitioner has preferred this petition. 4.1. Learned advocate Mr. S.N. Divatiya for the petitioner submitted that on bare perusal of the reasons recorded for reopening, it is apparent that there is no new fresh material available with the Assessing Officer for re....
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....t whatever was the consideration which prompted the assessee to purchase securities, the price paid for them was in the nature of capital outlay and no part of it could be set off as expenditure against income accruing on those securities. The Court was not directly concerned with the issue whether the securities form part of stock-in-trade or capital assets. 4. The question whether a particular item of investment in securities constitutes stock-in-trade or a Capital asset is a question of fact. In fact, the banks are generally governed by the instructions of the Reserve Bank of India from time to time with regard to the classification of assets and also the Accounting standards for investments. The Board has, therefore, decided that the....
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....d advocate Mr. Divatiya also submitted that the impugned notice issued under Section 148 of the Act, 1961 also refers to incorrect figures of LTCG. He invited the attention of the Court to the Return of Income filed by the petitioner which shows that there was a Short Term Capital Gain of Rs. 1,29,01,250/- after adjustment of the Short Term Capital Loss of Rs. 57,92,500/- and the Long Term Capital Gains was of Rs. 24,82,750/-. It was therefore submitted that the respondent has wrongly stated the figure of Rs. 82,75,250/- in the impugned notice issued under Section 148 of the Act, 1961. 4.8. In support of his submissions, learned advocate Mr. Divatiya referred to and relied upon the decision of the Apex Court in case of the Commissioner of ....
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....sidered the material available on record and on perusal of the reasons recorded for the issuance of notice under Section 148 of the Act, 1961, it is apparent that there is no new fresh material available with the respondent nor there is any live link shown by the respondent with the material on record for formation of reasonable belief to reopen the assessment within the period of four years. The respondent has relied upon the assessment record for the year under consideration. The respondent has also relied upon the Circular No. 665 of CBDT dated 5th October, 1993 for the issue of considering the Long Term Capital Gains and the Short Term Capital Gains shown by the petitioner in the return of income considering the sell of the Government o....