2025 (9) TMI 491

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....gnoring the fact that the entire assessment proceeding u/s 147 of the Act were invalid and bad in law. 03. The facts in brief are that the assessee filed the return of income on 29.07.2013, declaring total income at Rs. 8,71,380/- under the head income from other sources, after claiming deduction under Chapter VIA amounting to Rs. 1,04,768/-. The return was processed u/s 143(1) of the Act. Thereafter the ld. AO received the information from Pr. DIT (Investigation), Kolkata, vide letter dated 27.04.2015, that assessee had taken accommodation entries from M/S Sulabha Engg Ltd of bogus Long Term Capital Gain to the tune of Rs. 92,54,491/- and Short Term Capital Gain of Rs. 1,79,400/- on the transactions of shares through Sulbha Engineering.....

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....ffered the income on sale of shares of Sulbha Engineering and Ors. during A.Y. 2015-16 and therefore proceeding u/s 147 read with section 148 of the Act may be dropped. However, the ld. AO after discussing the reply of the assessee noted that the assessee has furnished purchase bill dated 28.03.2013, along with 3,000/- shares of Sulbha Engineering and Ors. However he failed to furnish the details of Long Term Capital Gain/ Short Term Capital Gain filed during the A.Y. 2013- 14. The ld. AO further stated that on perusal of the return of income filed for A.Y. 2013-14, the assessee has claimed an amount of Rs. 37,94,884/- as exempt being Long Term Capital Gain from transaction of shares, however, furnished no substantive evidences for the same....

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....issued notice u/s 133(6) of the Act on 21.09.2015 calling for the details of LTGC & STCG . Thereafter again AO Ward- 34(1) issued notice u/s 133(6) on 6.3.2020, calling for the same information . The copies of these notices are available at page no. 24 & 25 and 1 & 2 of the Paper Book. The fist said notice was replied on 05.10.2015, informing that assessee had earned Long Term Capital Gain on sale of shares of Paridhi Properties Limited during the impugned assessment year and all the necessary documents in the form of contract notes for purchase and sale of shares, details of application, Demat statement, etc., were filed in support thereto. The copies where all are available at page no.27 to 32 of the Paper Book. The second notice was repl....

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....l Gain of Rs. 37,94,884/- on sale of shares of Paridhi Properties Ltd which was duly shown in the return of income. The ld. Authorized Representative submitted that the reopening of proceedings u/s 147 read with section 148 of the Act were bad in law as the ld. AO after receiving information did not make any enquiry or independent application of mind on the information available on the assessment record. In defence of his argument the ld. Authorized Representative relied on the following decisions: i. CIT vs. Smt Paramji Kaur (2009) 311 ITR 38 (Punjab and Haryana) ii. CIT vs. Sfil Stock Broking Ltd. (2010) 325 ITR 285 (Delhi) iii. ITO Vs. Sarthak Securities (P.) Ld. (2010) 329 ITR 110 (Delhi) iv. Signatur....

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.... loss account, Demat Account, etc. and submitted that assessee has earned income by way of Long-Term Capital Gain on sale of shares of Paridhi Properties Ltd. Amounting to Rs. 37,94,883/- which has been shown in the Profit and Loss account and was also claimed as exempt. We note that during the instant assessment year the assessee has purchased 3,000/- shares of Sulbha Engineering and there was no sale of shares of Sulbha Engineering during the impugned year. Considering the facts and circumstances in the instant case, we are of the considered opinion that the case of the assessee was reopened invalidly without doing any enquiry or verification or without any independent application of mind despite the fact that the assessee had responded t....