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2015 (12) TMI 1502 - AT - Income TaxValidity of reopening of the case u/s 147 - AO treating the amount received on sale of shares which was claimed as Long-term-capital-gain, as income from other sources along with the commission paid for obtaining the alleged fictitious LTCG @ 0.15% - Held that:- From the analysis of the reasons recorded, it is evident that there is no specific information that the shares of N.E. Electronics Company purchased through M/s Goldstar Finvest Pvt Ltd. In April 2001 and sold through M/s Mahasagar Securities Pvt Ltd in June 2003 was a bogus transaction or was an accommodation entry. If the AO has received certain information from investigation wing then, it was incumbent upon him to apply his mind and peruse the assessee’s assessment record to see, whether the transactions undertaken by the assessee is also sham transaction or was only a accommodation entry taken from these companies of Mukesh Chokshi and there is any failure on the part of the assessee to disclose all material facts relating to such transaction.. More so, in this case the assessment sought to be reopened was beyond the period of 4 years. The ‘reason to believe’ entertained by the AO in such cases should be such that, whether there is any failure on the part of the assessee to disclose truly or full all material facts because that is a point of jurisdiction which AO has to acquire to reopen the competed assessment u/s 143(3). The information received from the Investigation wing was that assessee had also transacted with the said companies, i.e., it was also one of the beneficiary appearing in the list forwarded by the DDI(IT). There is no specific mention that, whether the particular transaction undertaken by the assessee of N.E. Electronics Pvt Ltd was a bogus transaction. From the perusal of the statement recorded of Shri Mukesh Chokshi it is evident that there is no mention or whisper about the assessee has taken accommodation entry to the assessee. The other most important fact here is that, the AO has not uttered a word about failure on the part of the assessee for disclosing the true and correct material facts. Such ascribing of failure of the assessee in the “reasons recorded” itself is mandatory, because from the reasons alone, it can be gathered whether there was any failure on the part of the assessee or not so as to acquire jurisdiction for reopening the case beyond the period of 4 years. There is not an iota of allegation of failure on the part of the assessee to disclose material facts. Thus, without there being any failure on the part of the assessee, the reopening of the assessment u/s 147 beyond a period of 4 years is not permissible in the present case, as the assessee had completely disclosed all these material facts which has also been subjected to the scrutiny. - Decided in favour of assessee.
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