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2016 (7) TMI 529 - HC - Income TaxReopening of assessment - nature of adventure in trade OR investment - Held that:- The reasons recorded by the Assessing Officer there is no averment of any failure on part of the assessee to disclose truly and fully all material facts. The reasons referred to material already on record and referred to the sale and purchase transactions of shares by the assessee. On the basis of such materials, the Assessing Officer recorded that frequency and volume of transaction was quite substantial. The assessee had sold 82% of its total purchases during the year itself. The balance unsold shares were purchased before two to three months of the year ending. The assessee had not held any stock for more than six months. According to the Assessing Officer, he therefore concluded that the assessee had made purchase and sale of shares with the motive to earn profit and the activity was, therefore, in the nature of adventure in trade and not by way of investment. We are not required to judge the validity of the Assessing Officer's prima facie conclusion that the petitioner was trading in shares and not investing to earn dividend. We only find that, in absence of failure on part of the petitioner-assessee to disclose truly and fully all materials facts, reopening of assessment, which was previously framed after scrutiny, could not have been done. Only on this count, the keeping petitioner's contention of change of opinion aside, impugned notice is quashed. - Decided in favour of assessee.
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