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2023 (3) TMI 620 - HC - Income Tax
Reopening of assessment u/s 147 - Eligible reasons as recorded by the Assessment Officer for reopening of the assessment - income related to alleged transaction being “undisclosed income” - Bogus/non disclosure of LTCG - HELD THAT:- As we are clear in our mind that the impugned notice, other than merely quoting that the Insight portal contains information as stated by the AO in his reasons for the reopening, does not further investigate the information or come to an independent assessment connecting the petitioner to the particular transactions specified in the information.
The entire notice proceeds on the basis of suspicion that the petitioner has entered into the fictitious transactions of the script M/s. Confidence Finance & Trading Ltd. AO has not even bothered to compare the information furnished by the petitioner in its reply or go through the income tax return of the petitioner, which was before the Assessment Officer, wherein long term capital gain transactions of securities were specifically disclosed.
Also in its reply/objections, to the re-opening, the petitioner had in support of its contention made specific references to documents to support the genuineness of the concerned share transactions, some of which are, statements of long term capital gains claimed as exempt under Section 10 (38) of the Act, bills cum contract notes issued by the Bombay Stock Exchange to substantiate that the stock was traded on market, his Demat statements where the delivery of shares was reflected, the confirmation of SEBI that the stock was traded through recognized brokers and the fact that the entire sale consideration was received through regular banking channels. None of these documents were examined by the Assessing Officer while rejecting the objections of the petitioner, leading us to believe that the entire exercise of a re-opening of assessment was purely based upon suspicion in the face of all the material disclosed by the petitioner to the Assessing Officer.
We do not find that any information of the petitioner has remained undisclosed in relation to the income offered by him to tax for the relevant assessment year. We also find that the material which the Assessment Officer has considered as “information” for the purpose of arriving at a satisfaction and having reason to believe that income of the petitioner has escaped assessment is not based upon any tangible information in order to proceed with the notice under Section 148 of the Act, beyond the prescribed period of limitation. Decided in favour of assessee.