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2015 (11) TMI 931 - HC - Income TaxReopening of assessment - undisclosed share transaction - Held that:- A perusal of the first proviso indicates that the reasons to believe also indicate that there was failure on the part of the assessee to make a return under Section 139 of the Act or in response to a notice under sub-section (1) of Section 142 or Section 148 of the Act has failed to disclose fully and truly all material facts necessary for his assessment. The foundational requirement for initiating reassessment proceedings after four years is, that the assessee had failed to disclose fully and truly all material facts. In the instant case, the reasons recorded is that the petitioner had purchased shares amounting to ₹ 54,22,500/- and the same was sold in the same year for ₹ 39,48,500/- and, therefore, incurred a loss of ₹ 14,74,000/- which has escaped assessment. From this, it is apparently clear that the assessee had disclosed all material facts. There is nothing to indicate failure on the part of the petitioner disclosing fully and truly all material facts. In the absence of this foundational requirement, the initiation of proceedings was patently erroneous and cannot be sustained. The notice is, accordingly, quashed - Decided against revenue
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