TaxTMI 
TaxTMI 
2024 (7) TMI 443
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....and setting aside the notice dated 27.03.2021 issued under section 148 of the Income Tax Act, 1961 [for short 'the Act'] as well as the impugned order dated 10.01.2022 rejecting the objection filed by the petitioner. 5. Brief facts as stated in the memo of the application are as under: 5.1 The petitioner is engaged in the business of trading in shares and security. The petitioner filed its original return of income for AY 2015-16 on 21.09.2015 declaring total loss of Rs. 2,00,23,842/-. 5.2 The case of the petitioner was selected for limited scrutiny by issuing notice u/s. 143(2) dated 20.09.2016 where on of the specific reasons for selection of case for scrutiny was "Derivative (Future) transactions" and in response to the same, the petitioner filed a reply dated 26.09.2016 submitting all the details regarding such derivatives transactions. Thereafter, notice u/s. 142(1) issued which were replied to by the petitioner from time to time. Vide notices dated 04.08.2017 and 19.09.2017, specific questions relating to the trading in future in a recognized stock exchange was raised. Details regarding the same were provided vide letter dated 29.08.2017 and 22.09.2017. Thereafter, the ass....
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.... the assessment order dated 30.12.2017 under section 143(3) of the Act was passed by the Assessing Officer after considering the details provided by the petitioner. It was therefore submitted that the petitioner has disclosed truly and fully all material facts during the course of regular assessment. Therefore, the impugned notice is without jurisdiction contrary to the proviso to section 147 of the Act. 6.2 It was further submitted that the impugned notice for reopening is issued without independent application of mind and is only based on borrowed satisfaction merely information received from the third party without disclosing the contents thereof in the reasons recorded. 6.3 It was further submitted that once the reasons recorded are nothing but change of opinion, as the issue of trading into shares and stock by the petitioner was examined thoroughly at the time of regular assessment and all the trades entered into by the petitioners were also considered and therefore, having examined the issue in detail and having formed an opinion the attempt of respondent to reopen again is merely a change of opinion and hence, no admissible as per the settled legal position. 6.4 It was th....
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....ccordance with law based on the information received by the Assessing Officer as there is failure on the part of the petitioner to disclose truly and fully all material facts as stated in the reasons recorded. 7.1 It was therefore submitted that the no interference is required in the impugned notice. 7.2 Learned Senior Standing Counsel Mr Karan Sanghani invited attention of the Court to the information received by the Assessing Officer that large scale reversal of tax in stock segment of the BSE Limited was reported wherein the investigation revealed that total of 291643 trades (comprising 81.38% of all the trades executed in the Stock Options Segment of BSE) involved reversal of buy and sell positions and petitioner is one of such entity which excluded total 09 units contracts by reversing its non-genuine trades within few minutes and in view of such reversal trades in quick succession with substantial price difference indicates towards employing a manipulative device in connection with its dealing in a liquid Stock Options Contracts. It was therefore submitted that such information was not available during the regular course of assessment and Assessing Officer passed assessment....
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....mmodation entry in the amount of Rs. 3 Lakhs. The reasons to believe recorded in writing by the Assessing Officer were detailed and showed application of mind. At the stage when reasons are recorded for reopening the assessment, the Assessing Officer is not required to build a fool proof case for making addition to the assesse's income; all that is required to do at that stage is to form a prima facie opinion or belief that income has escaped assessment. On the facts of the Court up held the reopening of assessment and dismissed the writ petition (A.Y. 2004-05)". Reliance is also placed on the decision in case of A.L.A firm vs. CIT (1991) 189 ITR 285 (SC). In this case, the Hon'ble Supreme Court held that the jurisdiction of the Income Tax Officer to reassess income arises if he has, in consequence of specific and relevant information coming into his possession subsequent to the previous concluded assessment, reason to believe that income chargeable to tax had escaped assessment. It was held that even if the information be such that if could have been obtained by the Income Tax Officer during the previous assessment proceedings by conducting an investigation or an enquiry but was n....
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....ankhiyani HUF generated artificial volume of Total 9,95,000 units which is 86% of the volume traded in the said contract form the market. 2.2 A similar modus operndi was adopted by Deepak Natvarlal Pankihyani HUF in respect of remaining trades in other unique contracts. It is observed from the trading of Deepak Natvarlal Pankhiyani HUF that is most of the trades the buy order and sell order has been entered in quick succession of each other . In all the 9 unique contracts Deepak Natvarlal Pankhiyani HUF had reversed its non-genuine trades within few minutes. The buy orders placed by Deepak Natvarlal Pankhiyani HUF were matched with sell orders of counterparties and sell orders placed by Deepak Natvarlal Pankhiyani HUF were matched with buy orders of counterparties in terms of number of units and price and time. Thus, the total volume generated through such non-genuine trades was 71,27,000 units. 2.4 Above reversal of trades in quick succession with substantial price difference indicates towards employing of a manipulative device in connection with its dealing in said illiquid Stock Options contracts. The nongenuineness of these transactions executed by Deepak Natvarlal Pankhi....