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Constellation Capital Ltd. Versus Income Tax Officer, Ward-10 (4) & Another

2016 (9) TMI 254 - DELHI HIGH COURT

Reopening of assessment - Held that:- In the present case, the opinion of the AO which is placed on the record discloses that his part of the order is entirely concerned with the transactions to which M/s. H.B. Relan and Company was exclusively a party to. Thereafter, in para 5, the opinion discusses the two transactions whereby the shares of M/s/ Constellation Capital (P) Ltd., were sold by the assessee. - The mere circumstance that in respect of this company, M/s. H.B. Relan and Company t .....

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which led to the reopening of assessment nowhere shows that the assessee had in fact failed to report the transaction itself. In completely omitting to see this aspect, we are of the opinion that the ITAT fell into fundamental error of law. The question of law is accordingly answered in favour of the assessee and against the revenue. - ITA 291/2016 - Dated:- 22-8-2016 - S. Ravindra Bhat And Deepa Sharma, JJ. For the Appellant : Sh. Arvind Kumar, Advocate For the Respondent : Sh. P. Roychaudhari, .....

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concerned formed his opinion that reassessment was necessary on account of information received with respect to the assessments in relation to one M/s. H.B. Relan and Company (hereafter the company ). It first alleged that the said company was engaging in entry operator transactions. The relevant part of the opinion of the AO, reopening the assessment, furnished to the assessee reads as follows: 5. In the instance case of the assessee, CONSTELLATION CAPITAL (P) LTD. the following credits have b .....

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refore the aforesaid credit entries are squarely hit by section 68 of the IT Act. I therefore have reasons to believe that this amount of ₹ 20,00,000/- represents income of the assessee chargeable to tax which has escaped assessment for A.Y. 2001-02. The assessee appealed against the final reassessment order made by the AO which had added a sum of ₹ 30 lakhs and brought it to tax under Section 68. The appeal also questioned the reopening of assessment under Section 147(1). The CIT(A) .....

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owever, tersely dismissed without much discussion. It is urged by the assessee firstly that the requirements of proviso to Section 147(1), i.e. non disclosure by reason of failure on its part is not discernable in the reassessment notice having regard to the opinion of the AO. Learned counsel relied upon a Division Bench judgment of this Court in Haryana Acrylic Manufacturing Company v. CIT 308 ITR 38 (Del) and another Division Bench decision of Bombay High Court in Hindustan Lever Limited v. R. .....

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