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2017 (7) TMI 729 - AT - Income TaxValidity of reopening of assessment - Held that:- Where the return initially filed is processed under section 143(1) of the Act, and an intimation is sent to an assessee, it is not an ‖assessment‖ in the strict sense of the term for the purposes of section 147 of the Act. In such event, there is no occasion for the Assessing Officer to form an opinion after examining the documents enclosed with the return whether in the form of balance-sheet, audited accounts, tax audit report, etc. The first proviso to section 147 of the Act applies only (a) where the initial assessment is under section 143(3) of the Act and (b) where such reopening is sought to be done after the expiry of four years from the end of the relevant assessment year. In other words, the requirement in the first proviso to section 147 of the Act being a failure on the part of the assessee ―to disclose fully and truly all material facts‖, it does not apply where the initial return has been processed under section 143(1) of the Act. In view of this we reverse the finding of the Ld. CIT appeal in holding that reopening of the proceeding is invalid. In the result ground No. 1 of the appeal of the revenue is allowed. Disallowing brought forward speculative loss - Held that:- If the transactions are carried out electronically at recognised stock exchange in shares and securities then the assessee is eligible to claim that the loss incurred by it in assessment year 2005 – 06 was not speculative in nature. Hence to determine this aspect we set aside ground No. 2 of the appeal of the revenue to the file of the learned assessing officer to determine whether loss incurred by the assessee is satisfying the conditions of eligible transactions or not such as whether transactions are carried out at recognised exchange for the respective trade or not. Needless to say that it is for the assessee to establish that the transactions carried out by him on which the losses are incurred are eligible transactions by production of trading notes of exchange, and therefore Ld. Assessing officer is also directed to grant adequate opportunity of hearing and adducing evidence in support of the claim to the assessee. Appeal of the revenue is allowed with above direction.
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