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2016 (3) TMI 676 - AT - Income TaxReopening of assessment - Held that:- Assessing Officer has initiated proceedings on the basis of information received from the documents pertaining to search operation in the case of Mahasagar Securities Ltd. and further the Assessing Officer has specifically mentioned the total value of transactions relating to purchase and sale of securities and proceedings have been initiated for reassessment to verify the value of transactions of ₹ 1,43,042/- which was sale consideration of Sardar Sarovar Bonds effected by the assessee through Alliance Intermediaries & Network Pvt. Ltd. on 9.8.2005. We, therefore, are of the view that ld. CIT(A) was correct in upholding that notice of reopening u/s 148 was not illegal and unlawful. Therefore, this ground of the assessee is dismissed. Treating the sale consideration of sale of Sardar Sarovar Bonds as unexplained income - Held that:- In view of the fact that assessee has submitted various information along with computation of income filed with original return of income prior to date of search and further supporting evidence supplied by assessee proving that some transaction has happened on 9.8.2005 by sale of Sardar Sarovar bonds which have been acquired by the assessee in January, 1995 and have been sold on 9.8.2005 after paying service tax and turnover charges through broker of National Stock Exchange mentioning three bonds in the contract note, then it was the duty of the Assessing Officer to verify the genuineness of the transaction through the share transfer department of Sardar Sarovar bonds after taking necessary information including distinctive number of Sardar Sarovar bonds from the assessee. Therefore, in our view this matter needs to be remitted back to the file of Assessing Officer with the instruction of providing necessary opportunity of hearing to the assessee after calling upon the distinctive number of Sardar Sarovar bonds and get the same verified with the help of assessee from the department of Sardar Sarovar Ltd. keeping record of shares transfer so as to verify that whether the assessee was the owner of three bonds of Sardar Sarovar from January, 1995 onwards till the date of sales i.e. 9.8.2005 and whether there was transfer of bonds from assessee’s account to some other persons’ account pursuant to sale of bonds. The Assessing Officer should frame a fresh assessment order on the basis of this information which is crucial for deciding that whether transaction shown by the assessee is long term capital gain was genuine or it was a sham transaction. Exemption u/s 10(38) of the Act is available only if there is a transfer of long term capital asset (held for more than one year) as exempt if it is equity share in a company or a unit of equity oriented fund. With reference to Sardar Sarovar bonds that whether they are in nature of equity shares or debenture is not clearly available on record and for this reason this issue is also remitted to the file of Assessing Officer to take necessary information from Sardar Sarovar Ltd. that whether Sardar Sarovar bonds are in the nature fo equity shares or debenture. If the Assessing Officer comes across to this effect that Sardar Sarovar bonds are not equity shares and only in the nature of debenture on which interest income is received by the debenture holder then the assessee will not be eligible for exemption income u/s 10(38) of the Act. - Decided partly in favour of assessee for statistical purposes.
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