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Commissioner of Income Tax-5 Versus M/s Payash Securities Pvt. Ltd.

2015 (12) TMI 144 - BOMBAY HIGH COURT

Reopening of assessment - unaccounted sale and purchase of a scrip - Held that:- The transactions of purchase and sale which is the basis of the reopening is factually not correct. The transactions of purchase and sale were of 62 scrips during the year. The sale and purchase of a scrip in large number when placed by the assessee on the electronic system of Stock Exchange appear broken in different transaction in view of multiple buyers and sellers of the same. Therefore, a single transaction of .....

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now being raised in the reopening notice. As observed by the Supreme Court in Commissioner of Income Tax Vs. Kelvinator of India Ltd., (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) a power to reassess is not a power to review. Therefore, an assessment cannot be reopened on a mere change of opinion in the absence of any fresh tangible material. - Decided in favour of assessee. - Income Tax Appeal No. 2022 of 2013 - Dated:- 18-11-2015 - M. S. Sanklecha And G. S. Kulkarani, JJ. For the Appellant : Mr .....

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Tribunal was justified in accepting the assessee's claim that purchase and sale of shares, mutual funds reflected in 1062 transactions were in the nature of investment inspite of the fact that the AO had held that the assessee was a trader in shares and not an investor and hence, profit on such trading activity was taxable as business income instead of capital gains as claimed by the assessee? (2) Whether on the facts and the circumstances of the case and in law the Tribunal was justified in .....

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r the head Long term capital gain and Short term capital gain arising out of sale and purchase of shares and securities. Thereafter, on 28 March 2011 the Assessing Officer issued a reopening notice and the reasons in support of the same as communicated to the respondent reads as under:- "On perusal of assessment records it is noted that during the relevant previous year, the assessee had purchased and sold shares of around 63 companies within a period of 12 months with total sale considerat .....

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from such activity amounting to ₹ 20.60 Cr. should be brought to tax business income as against assessee's claim of short term capital gains . I therefore have reason to believe that income to the extent of differential tax amount has escaped assessment within the meaning of Section 147 of the I.T.Act. The assessment is therefore reopened u/s.147 of the I.T.Act. 4. The respondent contested the jurisdiction of the Assessing Officer to reopen the assessment essentially on the ground that .....

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ess income'. In appeal the CIT(A) also did not disturb the order dated 29 December 2011 of the Assessing Officer. 5. The Tribunal by the impugned order accepted the respondent's contention and held the reopening notice dated 28 March 2011 is without jurisdiction. The impugned order records the fact that a detailed enquiry into the nature of the income declared as capital gains was done as is evident from the questionnaire dated 11 June 2008 issued to the respondent-assessee and the detai .....

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ew from that of the Assessing Officer in regular assessment proceedings. 6. Mrs.Bharucha, learned Counsel for the Revenue also urges that the impugned order ought not to have set aside the reopening notice under Section 148 of the Act as the number of sale and purchase transactions aggregating to 1062 in number were being offered under the head Short term capital gain . This itself indicated the fact that it was business income. 7. We find the aforesaid submission is not well founded as the Trib .....

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