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2013 (10) TMI 986 - AT - Income TaxLong term capital gain from sale of shares - bogus transaction or not - Reasons to be recorded for issuance of notice u/s 148 of the Income Tax Act – Income escaping assessment u/s 147 of the Act – Held that:- Assessing Officer recorded the reasons and that as per the information gathered, the assessee has entered into transaction with M/s. Mahasagar Securities Pvt. Ltd., Bombay and the said company was engaged in the business of providing fraudulent bills for bogus speculation profit/loss, short term capital gain and long term capital gain, commodity profit/loss on commodity trading. On, the contrary, the assessee had not entered into any transaction with M/s. Mahasagar Securities Pvt. Ltd. and in the original return of income, the assessee had enclosed the purchase and sale bills of M/s. Goldstar Finvest Pvt. Ltd. with whom the assessee entered into transaction and earned the long term capital gain, those bills were available with the Assessing Officer for scrutiny. However, the Assessing Officer recorded the reasons that assessee entered into transaction through M/s. Mahasagar Securities Pvt. Ltd. Bombay. Therefore, the very basis of reasons recorded by the Assessing Officer for reopening of the assessment was wrong because the assessee did not enter into any transaction to get the profit on account of long term capital gain with M/s. Mahasagar Securities Pvt. Ltd. Bombay rather the transaction was entered through M/s. Goldstar Finvest Pvt. Ltd, therefore, the belief of the Assessing Officer that income had escaped assessment which was earned by the assessee on the transactions entered into with M/s. Mahasagar Securities Pvt. Ltd. Bombay was incorrect - notice issued by the Assessing Officer under section 148 of the Act on the basis of the aforesaid reasons recorded under section 147 of the Act was not sustainable and the assessment proceedings on the basis of such notice were rightly set aside and quashed – Decided against the Revenue.
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