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2014 (6) TMI 2 - AT - Income TaxReassessment u/s 147 - fraudulent transactions in shares – Full and true disclosure - Held that:- The information which was received after the search operation was new information which was not revealed by the assessee and that information came to the notice of the AO consequently after the search was conducted - there was no belief of the AO - the reopening was held as not sustainable in the eyes of law - once, the reason recorded were assigned by the AO then it is wrong to say that he has not applied his mind, there was a proper application of mind by the AO - The AO has given copy of the “reasons for reopening” to the assessee which was duly signed - although the notice was issued after the expiry of four years but it was issued within six year- This fact has not been controverted by the assessee - the time limit for notice as prescribed u/s 149 of IT Act was not in controversy because the amount which has escaped the assessment had exceeded Rs.1 lac – thus, there was no force on the ground of the assessee challenging the reopening of the assessment – Decided against Assessee. Addition made – Sale and purchase of scrips – Held that:- The purchase as well as the sale transactions of the scrips was not genuine - The reason for taking this view is that the purchase rate had not tallied with the rate as per BSE website and that the purchases have also been made in cash - only paper transactions have been made because there was no evidence of physical delivery of the shares - The AO was right in asking the details of the dividend if any received during the holding period - But no such information was provided at any stage of proceeding. Even, the entries in the Demat Account were not sacrosanct because the AO had found on investigation that those were all “off market” transactions - those companies were nothing but entry providers - it was proved beyond doubt that Mahasagar Group was engaged in the business of issuance of fraudulent bills – thus, the order of the CIT(A) is upheld – Decided against Assessee.
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