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2024 (5) TMI 217 - ITAT MUMBAIReopening of assessment u/s 147 - Bogus LTCG of shares - reason to believe - general finding of Kolkata Investigation Directorate in 84 penny stock companies and modus operandi and second paragraph mentioned that assessee is one such person who has taken accommodation entry of bogus long term gain - HELD THAT:- As brought on record that assessee has earned short term capital loss as these shares were purchased on 16/03/2015 & 17/03/2015 and were sold on 18/03/2015 & 19/03/2015. The said short term capital loss has not been set off against any income or has been carried forward by the assessee. So there was no benefit to the assessee on this transaction which can lead to any inference that assessee must have engaged in some clandestine bogus entry for some benefit. There is no co-relation between the reasons recorded and the addition which has been made by the ld. AO. If ld. AO had such a belief during the course of assessment proceedings, he could have recorded the reasons on investment made in the purchase of shares. Thus, there is no link between the information and the reasons recorded and the assessment which has been made by the ld. AO. It is sine-qua-non that for reopening the assessment, AO should have reason to believe that income chargeable to tax has escaped assessment and such reason to belief should be based on material and information having live link nexus or direct nexus with the income escaping assessment, which here in this case is purely lacking. In fact the reasons have been recorded on a wrong premise and on a wrong information and ld. AO has not even applied his mind on such information or verified the records before issuing notice u/s. 148. Such reasons cannot be sustained or give jurisdiction to the ld. AO to reopen the case and accordingly, we hold that the entire reopening is bad in law and consequently entire assessment proceeding is quashed. Appeal of the assessee is allowed.
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