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2025 (6) TMI 327
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....ed under Section 148A (d) of the Income Tax Act, 1961 [the Act] and consequential notice dated 15.07.2022 [impugned notice] issued under Section 148 of the Act in respect of the Assessment Year [AY] 2013-14. The petitioner also prays that the Assessing Officer [AO] be restrained from taking any steps pursuant to the impugned notice. 2. The present petition was listed on 20.03.2023 and this Court passed the interim order that the proceedings pursuant to the impugned notice may continue, however, any adverse order if passed, shall the same would not be given effect to till further directions of the Court. There is no cavil that assessment order, which was passed subsequently would be subject to the outcome of the petitioner's challenge in ....
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.... Act] did not contain any reason or material which is suggestive of income escape assessment. In terms of the decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal (supra), the AO had thirty days' time to provide the relevant material, which is required to be accompanied a notice under Section 148A (b) of the Act. In compliance of the said decision, the AO issued the supplementary notice dated 21.05.2022. The said notice alleged that the AO had information to the effect that Long Term Capital Gain [LTCG] was booked by the beneficiary in lieu of the commission in respect of the purchase and sale of penny stocks - 1,00,000 shares of M/s Gemstone Investment Limited [Gemstone] and M/s Priti Mercantile Private Limited [PMPL]. ....
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....mstone; b) Finance ledger; c) Sale contract note for sale of Gemstone; d) Financial letter indicating sale of the subject shares; e) Income tax return of the petitioner; and f) Purchase and sale contract notes regarding shares of PMPL. 8. However, the said reply was not accepted and the AO passed the impugned order holding that it was a fit case for issuance of notice under Section 148 of the Act. 9. The material provided by the petitioner indicates that the petitioner paid an aggregate amount of Rs. 9,08,887/- through banking channel as purchase consideration for the shares of two entities - Gemstone and PMPL. The petitioner contends that the purchase consideration, which is reflected in t....
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....e real transaction but the authority is entitled to look behind the transactions and ascertain the motive behind the transaction. The short term capital gain as bogus since derived from rigging of the scrip prices and invariably accommodation entry in collusion with concerned entry operator. The payment through bank for purchase of penny scrip also required verification of source which requires deep scrutiny in this case." 10. We consider it apposite to set out the relevant extract of the computation of the income, which was filed with the income tax returns. The same is set out below: - "Statement of Long Term Capital Gain [Transaction Act, Exempt under Section 10 (38)] Name of Company Date of Sale Sales Pr....
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....and the proceedings for assessment of the said information is required to be initiated. 14. The only question, which needs to be considered is whether the information available with the AO and as furnished to the petitioner, suggested that income of the petitioner has escaped or likely to be escaped assessment exceeds Rs. 50.00 Lacs. 15. According to the petitioner, the only net income, which is claimed as exempted would be considered as income that has escaped assessment on the basis of transaction of sale and purchase of stock of Gemstone and PMPL as disclosed by the petitioner. However, according to the Revenue, it is not only the income which was claimed as exempt under Section 10(38) of the Act as also the purchase consideration ....
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....ad been paid and the money was received back in cash. There is no material to indicate that said transaction was conducted in the FY 2012-13 [relating to AY 2013-14]. 19. It is also necessary to bear in mind that any purchase consideration reflected by the petitioner in the books of accounts would necessarily be from the disclosed sources. Thus, the only income that could possibly escape assessment in transaction of sale and purchase of shares to book exempt income would be the difference between the purchase consideration and the sale consideration. 20. The transaction of making payment in cheque and receiving the money in cash is a separate transaction. There was no such allegation in the notice issued to the petitioner that there w....