2023 (11) TMI 27

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....0-11. 2. The grounds of appeal raised by the assessee read as under: "1. That the ld. CIT(A) has erred in not quashing the proceedings initiated u/s. 147. 2. That the ld. CIT(A) has erred in not appreciating the law that no other addition may survive, unless & until the reportedly escaped income (Rs. 10,02,865/-) is assessed. 3. That the ld. CIT(A) has erred in not disapproving the Id AO's finding that the Short Term Capital Gain of Rs. 1,37,643/-, (which arose on sale of 26500 shares of Amulya Leasing & Finance Limited) were bogus. 4. That the ld. CIT(A) has erred in upholding the treatment given by the Id AO to the amount of Short Term Capital Gain of Rs. 1,37,643/-(which arose on sale of 26500 shares of Amulya Leasing & Fina....

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....nt of income other than income allegedly escaped assessment in the reasons recorded is contingent upon the assessment of income allegedly escaped assessment in the reasons recorded. The ld. counsel thus contended that the re-assessment framed in the instant case is totally divorced from the reasons recorded and thus the impugned additions are not sustainable in law. 4. The reasons recorded by the Assessing Officer under reference is reproduced hereunder: "Reasons for reopening of the assessment in the case of Sh. Saket Agarwal for AY 2011-12 u/s. 147 of the Income Tax Act, 1961. The assessee is an individual and has income from business and profession, income from capital gains and income from other sources. The assessee filed return o....

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....as under:    (in crores) March ending Amulya Leasing & Finance Ltd. (now Apollo Pipes Ltd.) 2010 2.19 2011 2.53 2012 0.52 This was in complete contrast to the large fluctuation in prices of shares of this scrip during FY 10-11. Such huge price variations are not supported by the financials of the company. This also suggests that prices of the scrip were rigged in order to allow beneficiaries to book bogus gains. During enquiries, it was also found that certain brokers and entry providers also made statements before the Directorate of Investigation, Kolkata and Pata wherein they admitted to having been involved in manipulation of prices of such scrips. 5. It is evident that M/s Amulya Leasing and Finance Ltd. (now Apo....

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....ent is with reference to income claimed as exempt under Section 10(38) of the Act to the extent of Rs. 10,02,865/- in relation to trading in the scrips namely, Amulya Leasing and Financing Ltd. However, a perusal of the re-assessment order shows that the additions have been made by invoking Section 68 of the Act for an amount of Rs. 3,13,227/- holding the same to be unexplained cash credit. Thus, the 'reason to believe' which in the first instance, impelled the Department to reopen the proceedings has undergone a complete change. 6. It is well settled that once the Assessing Officer assumes jurisdiction to reopen the proceedings under Section 148, he cannot independently make additions in respect of other income which escapes assessment un....