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2023 (11) TMI 42 - DELHI HIGH COURTReopening of assessment - reasons to believe - borrowed satisfaction or independent application of mind - AO had obtained information from the Kolkata Division of the Investigation Directorate regarding the booking of LTCG which was relatable to trade in shares of Blue Print Securities Limited by the petitioner/assessee - HELD THAT:- The petitioner, in the letter, had indicated that he had purchased 800 equity shares at the face value of Rs. 10/- each, of a company going by the name Ranisati Commotrade Pvt. Ltd. on 05.04.2010. These shares, according to the petitioner’s/assessee’s explanation, were transferred to him on 28.04.2010. Also asserted by the petitioner/assessee that the said company was amalgamated with Blue Print Securities Limited, and that the amalgamation was sanctioned by the Calcutta High Court via order dated 25.11.2010. Petitioner/assessee had taken a stand that, against 800 shares held by him in Ranisati Commotrade Pvt. Ltd., he had received 32,000 shares of Blue Print Securities Ltd. at a face value of Rs. 10/-. It is these shares that the petitioner had sold and, thus, earned a long-term capital gain amounting to Rs. 94,85,882.78/-. Interestingly, in the ‘reason to believe’, there is no reference to the original assessment order dated 14.01.2015. Had the AO looked at the assessment order and the record concerning the petitioner’s/assessee’s case, the explanation given by the petitioner/assessee would have come to light. AO being unable to tie up the information received by him, with the alleged failure on the part of the petitioner to ‘fully and truly’ disclose all material facts, attains criticality in the instant case. There is a non-application of mind by the AO. The AO appears to have solely proceeded based on the general information received by him. The AO, in a sense, has taken recourse to ‘borrowed’ satisfaction. There is nothing in the ‘reason to believe’ that would show how the AO has reached a figure of Rs. 1,04,38,000/-. The only clue concerning that figure is in the information that he had received from the Kolkata Division of the Investigation Directorate. Also noted AO verily believed, for some strange reason, that the petitioner’s/assessee’s case was the one which fell within four (4) years, which is why he had adverted to Section 151(2) rather than Section 151(1) of the Act. Reassessment set aside - Decided in favour of assessee.
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