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2008 (2) TMI 867 - HC - Income TaxSale of shares - investment or stock-in-trade - Sale of units of Prudential ICICI Technology Fund - Notice issued under section 14A - erroneous and prejudicial order - CIT passed an order setting aside the assessment order and directing the Assessing Officer to make a fresh assessment - HELD THAT:- Tribunal came to the conclusion that the shares held by the assessee in BT Tech Net Ltd. were an investment and therefore, any profit earned on the sale thereof is required to be treated as capital gains. Whether the shares were held by the assessee as an investment or stock-in-trade is a matter of fact, and we do not find any perversity in the view taken by the Tribunal that the shares were held as an investment. Sale of units of Prudential ICICI Technology Fund - HELD THAT:- Tribunal noted that there is a factual error committed by the CIT inasmuch as the units were purchased by the assessee on 3-3-2000 and not on 3-3-2001. Therefore, there was no question of manipulating the loss in the month of March, 2001 itself for the purpose of avoiding tax on capital gains. Following the decision in Rayon Silk Mills’ case [1995 (11) TMI 39 - GUJARAT HIGH COURT] we are of the view that the Tribunal has not erred in the conclusion that it has arrived at. There was enough material available to show that the assessment was not prejudicial to the interest of the revenue. Notice issued under section 14A - It has rightly been held by the Tribunal that this issue did not find a mention in the notice sent by the CIT under section 263 of the Act to the assessee. It has been held in CIT v. Smt. R.G. Umaranee [2002 (11) TMI 49 - MADRAS HIGH COURT] that in the absence of a notice given by the Commissioner on a particular issue, it is not open for him to re-open the proceedings on that issue which is different altogether and initiate an inquiry thereon. We are of the opinion that since the assessee was not put to the notice in regard to any issue under section 14A of the Act, the CIT could not enlarge the scope of the proceedings on whatever issue arose during the proceedings. We do not find any error or illegality in the order passed by the Tribunal. No substantial question of law arises - Dismissed.
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