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2019 (10) TMI 906 - AT - Income TaxReopening of assessment - Bogus LTCG - Disallowance of the claim of long term capital gain u/s. 10(38) - HELD THAT:- We find that Hon'ble Apex Court in the case of Rajesh Jhaveri Stock Brokers Private Ltd. [2007 (5) TMI 197 - SUPREME COURT] has held that intimation under section 143(1) is not an assessment order. Hence it cannot be said that there was any application of mind by the assessing officer in the original assessment. Moreover, at the time of reopening the escapement of income need not be conclusively proved. In this view of the matter in our considered opinion the reopening is valid We find that it is the claim of the assessee that he has earned the gain in this case where the share price of a little-known company has jumped many times in no time and that all documentary records are available. It is noted that the assessee purchased shares at cost of ₹ 8,342/- on 29/30.4.2003. They were sold at ₹ 3,19,288/- on 23.11.2004, registering astonishing jump in share price. But there is no economic or financial justification for such astonishing jump. Quantity, price and time and sale, parties being persistent in number of such trade transactions with huge price variations, it will be too naïve to hold that the transactions are through screen-based trading and hence anonymous. Such conclusion would be overlooking the prior meeting of minds involving synchronization of buy and sell order and not negotiated deals as per the board's circular. The impugned transactions are manipulative/deceptive device to create a desired loss and/or profit. Such synchronized trading is violative of transparent norms of trading in securities. If the findings of SAT are to be sustained, it would have serious repercussions undermining the integrity of the market and the impugned order of SAT is liable to be set aside. On the above additional reasoning also, agree with the conclusion allowing the appeal preferred by SEBI against the traders. We also agree with the conclusion dismissing the appeal preferred by the SEBI against the brokers - Decided against assessee.
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