AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 159
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.... of the case is that the assessee is an individual filed his original Return of Income for the Asst. Year 2017-18 on 30-03-2018 declaring income of Rs. 67,22,750/-. Information received from the Investigation Wing that a search operation was carried on the Kushal Group of Companies, Ahmedabad which was providing bogus accommodation entries of Long Term Capital Gain/Loss and Short Term Capital Gain/Loss. The assessee was one among the beneficiary who was obtained Long Term Capital Gain of Rs. 29,55,558/- and claimed exemption u/s 10(38) of the Act. Thus the income chargeable to tax of Rs. 29,55,558/- for the Asst. Year 2017- 18 has escaped assessment within the meaning of Section 147 of the Act and show cause notice u/s 148A(b) of the Act was issued on 23-05-2022. The assessee filed a detailed reply that the reopening notice is without jurisdiction since the escaped income claimed is less than Rs. 50,00,000/- and there is no question of escaped income and requested to drop the reassessment proceedings. 2.1. The above objection was considered by the Assessing Officer and found not acceptable and proceeded with reassessment by making addition of Rs. 29,55,558/- and denied the claim....
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.... erred in applying Section 1158BBE to the total addition of Rs. 33,81,627/- made on account of long-term capital gain of Rs. 29,55,558/- from the security transaction in Kushal Ltd. and Rs 4,26,069/- for the purchase transaction treated as unexplained investment. The facts and evidence clearly demonstrate that there is no unexplained money or investment under Sections 69A or 69 of the Income Tax Act, 1961, and no income has escaped assessment. Further CIT(Appeals) has erred in dismissing the appeal. Therefore, Section 115BBE cannot be invoked, and its application in this case is both legally and factually incorrect. The application of Section 115BBE should be deleted. 5. The Ld. A.O. has erred in law and in facts in initiating the penalty u/s 271AAC of the I.T. Act on total addition made for Rs. 33,81,627/-. 6. Add, alter, amend or withdraw: The appellant may be allowed to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal. 5. Ld. Counsel Shri Deepak Shah appearing for the assessee submitted before us a Paper Book and case laws in support of his arguments. Ld. Counsel submitted that the reopening of assessm....
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....has escaped assessment, which is much below Rs. 50 lakhs as per Explanation 2 to Clause (b) of Section 148A of the Act. In these circumstances, the validity of reopening is considered to be invalid by various decisions of this Tribunal and Hon'ble High Courts. 7.2. The Co-ordinate Bench decision of Mumbai Bench in the case of Pankaj Chandrakant Pimple Vs. International Tax reported in [2025] 174 taxmann.com 169 (Mumbai-Trib.) wherein it is held as follows: "... 7. On perusal of the above contentions raised by the assessee, it is evident that the ld. AO has issued the impugned notice u/s. 148 of the Act, dated 19.07.2022, after 3 years from the relevant assessment year which is A.Y. 2017-18 for which the 3 year period ends on 31.03.2021. Section 149(1) of the Act mandates that notice u/s. 148 cannot be issued after lapse of 3 years from the end of the assessment year, unless the ld. AO is in possession of books of accounts or other documents or evidence which reveal that the income which has escaped assessment is Rs. 50,00,000/- or more for that year. The ld. AO has passed order u/s. 148A(d) of the Act dated 19.07.2022, and notice u/s. 148 of the Act, was issued on 19.07....
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....rating Company Private Limited v. Assistant Commissioner of Income Tax [W. P. (C) No. 4845 of 2025, dated 17-4-2025]/ 2025:DHC:2690-DB where this court had held as under: "10. There is no cavil that the income alleged to have escaped assessment for the AY 2018-19 is under Rs. 50 lakhs. However, it is contended that the same would not preclude the AO from issuing a notice under Section 148 of the Act as cumulatively the income that is alleged to have escaped assessment is to the extent of 0.73 crores which is in excess of Rs. 50 lakhs. Mr Gupta, the learned counsel appearing for the Revenue has referred to Section 149(1A) of the Act in support of his contention. 11. Before proceeding further, it would be relevant to refer to Section 149 of the Act. The relevant extract of Section 149 of the Act is set out below: "149. Time limit for notice. - (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessmen....
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....hat the income chargeable to tax is represented in the form of an "asset" or "expenditure in relation to an event or occasion". Thus, in cases where the income that has escaped assessment is represented by 'an asset', notwithstanding that the said asset is on account of income that escaped assessment for more than one previous years, the condition under Section 149(1)(b) of the Act would be satisfied, if the value of the asset exceeds Rs. 50 lakhs. The same would hold true if there is an expenditure in relation to an 'event' or 'occasion', which exceeds the value of Rs. 50 lakhs. In this case as well as notwithstanding that the expenditure has been incurred in different previous years, the condition under Section 149(1)(b) of the Act would be satisfied if the cumulative value of the expenditure exceeds Rs. 50 lakhs, provided that the same is related to an event or occasion." 20. Concededly, the issue involved in the present case is covered by the decision of this court in L-1 Identity Solutions Operating Company Private Limited (supra). The petition is accordingly allowed and the impugned order dated 31.03.2024 passed under Section 148A(d) of the Ac....
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....ponse from the assessee, passed exparte appellate order confirming the additions made by the assessing officer. 13. Aggrieved against the same, the assessee in appeal in ITA No. 44/Ahd/2025 for Asst. Year 2018-19 before us raising the following Grounds of Appeal: 1. On the facts and circumstances of the case, as well as the applicable law, the learned A.O. has erred in reopening the assessment under Section 147 of the Income Tax Act, 1961, by issuing a notice under Section 148. Further, CIT(Appeals) has erred in dismissing the appeal. The reopening of the assessment is unjustified and contrary to the provisions of the law. 2. On the facts and circumstances of the case, as well as the relevant legal provisions, the A.O. has wrongly disallowed the short-term capital loss of Rs. 52,86,454/- claimed by the assessee in relation to the security transaction in Kushal Ltd. The A.O. also incorrectly treated this transaction as an accommodation entry. Further, CIT(Appeals) has erred in dismissing the appeal. The disallowance of the short-term capital loss is incorrect both in law and in fact and is therefore requested to be deleted. 3. The A.O. has misinterprete....
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....t seeks permission to add, alter, amend, or withdraw any ground of appeal either before or during the hearing of this appeal. 14. We have considered the rival submissions and perused the materials available on record. The reply of the assessee in response to notice u/s. 148A(b) reads as follows: "In the instant case, AO has made allegation of investment is a bogus accommodation entries. Purchase was made through BSE platform. Transaction was through banking channel after all, Investment in share scrip is capital in nature. If at all one has to tax then it has to be Capital Gain and not entire investment. For taxation of capital gain there has to be transfer of capital within the meaning of Sec 2(47) of the act. AO has not demonstrated any reason or belief that investment is unexplained. AO only relied upon information passed on from DDIT (Inv) Ahmedabad and failed to apply his observations on such information. However assessee in return under section 139(1) in respect to capital gain has declared income as stated below for Assessment Year: PARTICULARS AY 2018-19 SALE CONSIDERATION CG 65,87,059 COST OF ACQUISITION OF SHARE (1,18,73,513....