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COMMISSIONER OF INCOME TAX-II Versus GAJMUCH INVESTMENTS PVT LTD.,

2016 (6) TMI 111 - ANDHRA PRADESH HIGH COURT

Reopening of assessment - reasons to believe - long term capital loss set off against the short term capital gain claimed by the assessee necessitated re-computation and re-determination - Held that:- Exercise of jurisdiction under Section 147 of the Act, in the present case, is not for the failure of the assessee to disclose fully and truly all material facts necessary for his assessment, but because the Assessing Officer was of the opinion that the set off claimed by the assessee earlier, and .....

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d under Section 143(3) of the Act. - Decided in favour of assessee - I.T.T.A.No.393 of 2015 - Dated:- 18-11-2015 - SRI RAMESH RANGANATHAN AND SRI M. SEETHARAMA MURTI, JJ. FOR THE PETITIONER : NARASIMHA SARMA JUDGMENT(Per the Hon ble Sri Justice Ramesh Ranganathan) This appeal, under Section 260A of the Income Tax Act, 1961 ( the Act , for brevity), is preferred against the order passed by the Income Tax Appellate Tribunal ( the Tribunal , for short) in ITA.No.1292/Hyd/2013 dated 27.06.2014. The .....

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8,266/- which was processed under Section 143(1) of the Act. Thereafter, the assessee s return was selected for scrutiny, and an order, under Section 143(3) of the Act, was passed on 20.07.2007 determining NIL income after setting off the brought forward losses of ₹ 1,54,88,864/-, and long term capital loss of ₹ 2,30,08,266/-. On verification, the Assessing Officer noticed that the assessee had derived short term capital gains of ₹ 68,94,886/- from the sale of shares which was .....

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short term capital gain. The Assessing Officer reopened the assessment under Section 147 of the Act, and issued a notice under Section 148 of the Act on 26.03.2012. In reply, the assessee submitted a letter dated 20.11.2012 requesting that the return filed on 30.10.2005 be treated as a reply to the notice issued under Section 148 of the Act. During assessment proceedings, the assessee objected to the initiation of proceedings under Section 147 of the Act after expiry of a period of four years fr .....

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bad in law; there was no new information on record; the Assessing Officer had not brought out any details showing how income had escaped assessment, what was the default committed by the assessee, and what inaccurate information had been provided by them; the Assessing Officer had taken a conscious decision regarding the issue at hand and, after six years, the assessment could not be reopened on the basis of the very same information as it was nothing but a change of opinion. The order of the A .....

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essary for completion of assessment; the reasons recorded by the Assessing Officer, for forming a belief that the income had escaped assessment, were already mentioned in the assessment order; it was evident that, on re-examination of the computation of income and other statements filed by the asseesee along with the return, the Assessing Officer had formed an opinion that set off of short term capital gain, derived from the sale of shares, against long term capital loss was not permissible; and .....

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the assessment; and the condition precedent for reopening the assessment, beyond four years, was not satisfied in the present case. The Tribunal further held that reopening of assessment, in the present case, was not only on a mere change of opinion but also amounted to review of the assessment order passed earlier under Section 143(3) of the Act. The order of the Commissioner of Income Tax (Appeals) was affirmed, and the appeal preferred by the Revenue was dismissed. Sri B. Narasimha Sarma, lea .....

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