AI Drafter 
TaxTMI 
TaxTMI 
2024 (3) TMI 381
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....dividual, works for salaries/remuneration with one Pioneer Investcorp Ltd. and Pioneer Insurance & Reinsurance Brokers Private Ltd. Petitioner also used to engage in the business of trading/investments in shares and securities. For Assessment Year ("AY") 2014-15, Petitioner filed his return of income ("ROI") on 24th July, 2014 declaring a total income of Rs. 88,13,470/-. The ROI was initially processed under Section 143(1) of the Income Tax Act, 1961 ("the Act"). 2. Petitioner's case was selected for scrutiny and Petitioner received a notice dated 28th August, 2015 under Section 143(2) of the Act. Thereafter, Respondent No. 1 issued a notice dated 18th February, 2016 under Section 142(1) of the Act calling upon Petitioner to provide vari....
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....e price is disclosed as Rs. 6,71,29,994.58 and gain of Rs. 6,44,61,214.58 is also disclosed. 4. Following the introduction of Chapter IX dealing with Income Declaration Scheme, 2016 ("IDS, 2016") by the Finance Act, 2016, which came into effect from 1st June, 2016 till 30th September, 2016, Petitioner, to get peace of mind, decided to take advantage of the IDS, 2016 and filed a declaration under Section 183 of the Finance Act, 2016. Petitioner declared an amount of Rs. 6,84,61,220/- which consisted of Rs. 6,44,61,215/- pertaining to long term capital gains on shares of SAL and Rs. 40,00,000/- pertaining to cash income. Petitioner's declaration was accepted pursuant to which Petitioner paid the amounts payable under the Finance Act, 2016 ....
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....d for reopening, Respondent No. 1 refers to survey action under Section 133A of the Act conducted at Petitioner's office and observes that Petitioner has disclosed an amount of Rs. 6,44,61,220/- as net long term capital gain on sale of shares of SAL and Petitioner claimed long term capital gain as exempt under Section 10(38) of the Act for AY 2014-15. Respondent No. 1 observed that Petitioner had purchased these shares in AY 2012-13 for Rs. 26,68,780/- at Rs. 20/- per share and sold the shares at Rs. 6,71,29,995/- at an average price of Rs. 503/- per share resulting into net long term capital gain of Rs. 6,44,61,220/- and Petitioner had submitted broker's note, bank statements and documents related to the acquisition and sale of these share....
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.... this stage itself. 9. Mr. Pardiwalla submitted:- (i) At the outset, that since admittedly an assessment order under Section 143(3) of the Act has been passed on 26th April, 2016 and the notice under Section 148 of the Act has been issued only on 31st March 2021, i.e., more than four years after the expiry of relevant assessment year, the proviso to Section 147 of the Act would apply inasmuch as reopening is not permissible unless there has been a failure on the part of Petitioner to truly and fully disclose material facts relevant to the assessment; (ii) As regards the cost of purchase of the alleged penny shares amounting to Rs. 26,68,780/-, the same is not only disclosed in the computation of income, but it was also ....
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....ared with any other law enforcement agency and not only that it will not be shared within the Income Tax Department for any investigation in respect of a valid declaration. Since the declaration in Petitioner's case was a valid declaration, the information as contained in the declaration filed by Petitioner could not have been made available to the AO, who issued the notice under Section 148 of the Act. We would agree with Mr. Pardiwalla; (vii) It was also submitted that answer to question no. 5 in the clarifications, which says "where a valid declaration is made after making valuation as per the provisions of the scheme read with IDS Rules and tax, surcharge and penalty as specified in the scheme have been paid, whether the Depart....
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....ement of income that Petitioner had in fact paid any commission to any broker or operator. The AO proceeds on a surmise that there was no such free service available and, therefore, Petitioner would have paid brokerage. The AO having observed that the brokerage/commission varied between 0.5% to 5% does not even explain why he takes into account 5% as the brokerage paid and not 0.5% or any other figure in that band. 14. We are also satisfied that there has been no failure on the part of Petitioner to disclose any material fact. We say this because in the computation of income filed by Petitioner, (a) Petitioner has disclosed long term capital gain on sale of shares of Rs. 6,44,61,214.58, (b) purchase of 1,33,439 equity s....