TaxTMI 
TaxTMI 
2025 (3) TMI 2157
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.... 144 of the Income-tax Act (hereinafter referred to as the "Act"), dated 13.12.2017 for Assessment Year 2010-11. 2. Grounds taken by the assessee are reproduced as under: "1. On the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in upholding that issue of notice u/s. 148 of the IT Act 1961 by the Ld AO is valid and the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under. 2. On the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in upholding the ex-parte order passed u/s. 144 of the IT Act 1961 by the Ld AO without giving proper opportunity and the reasons assigned for doing so are wrong and contr....
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....s. 21,98,750/- on account of client code modification through Tirupathi Equity Ltd., is baseless, null and void. The reasons to believe, recorded are reasons to suspect and are therefore bad in law. Ld. Assessing Officer noted that a survey u/s.133A was carried out by Addl. ADIT (Inv), Ahmedabad at the premises of 12 brokers and few of their clients across the country. From the documents and computer backups seized from the said survey operations, it was ascertained that these clients had taken fictitious profits to cover up their undisclosed income or set off these profits against losses. 3.1. In this respect, it is important to take note of the reasons to believe, recorded by the ld. Assessing Officer for the purpose of impugned re-ass....
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....rovision of Sec 147 of Income Tax Act, 1961 Therefore it is proposed to reopen the assessment for the AY 2010-11 by issues of notice U/s 148 of the IT Act." 3.2. Ld. Assessing Officer rejected the objections raised by the assessee on the initiation of the re-assessment proceedings. Against the show cause notice issued by the ld. Assessing Officer for furnishing explanation and documentary evidences, to justify the claim of the assessee, assessee submitted that membership of Tirupathi Equities Ltd. was surrendered and last trade executed by it was on 26.03.2009. To corroborate this, assessee furnished a letter issued by Securities Exchange Board of India (SEBI) which confirmed this fact. Extract of the said letter is reproduced as under: ....
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....ted to be lying in the common pool of the trader/broker. Thus, it is not necessary that the appellant should have taken over the loss of any of the clients of M/s. Tirupathi Equities Ltd., The said concern may have simply facilitated obtaining of such loss from any other brokers/entities." (emphasis supplied by us by underline) 4.1. From the above observations of ld. CIT(A), it is evident that the ground raised by the assessee was dismissed on surmises and presumption with any specific fact brought on record with corroborative evidence against the assessee. 4.2. Further to this, reliance was placed by the assessee on the decision of Hon'ble Jurisdictional High Court of Bombay in the case of Coronation Agro Industries Ltd. vs. DCIT ....
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....difications done in the client code was not on account of a genuine error, originally occurred while punching the trade. The material available is that there is a client code modification done by the Assessee's broker but there is no link from there to conclude that it was done to escape assessment of a part of its income. of its income. Prima facie, this appears to be a case of reason to suspect and not reason to believe that income chargeable to tax has escaped assessment. 5. In the above view, prima facie, we are of the view that the impugned notice is without jurisdiction as it lacks reason to believe that to tax has escaped assessment." 5. In the present case, before us, from the reasons to believe recorded by the ld. A....