TMI Blog2016 (12) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... lected /disclosed in his books of accounts produced with return of income in the earlier years, more particularly, in the preceding year of Assessment Year 2011-12. The aforesaid is evident from the material produced on the query raised by the Assessing Officer in the scrutiny proceedings. Under the circumstances also the impugned notice to reopen the assessment cannot be sustained. - Decided in favour of assessee Non deduction of TDS - Held that:- It is an admitted position that the petitioner – assessee did not claim any interest under Section 40(a)(ia) of the Income Tax Act, and therefore, on the aforesaid ground the Assessing Officer is not justified in reopening the assessment.- Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 17223 of 2016 - - - Dated:- 29-11-2016 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITIONER : MR RK PATEL, ADVOCATE with MR DARSHAN R PATEL, ADVOCATE FOR THE RESPONDENT : MR MANISH R BHATT, SENIOR ADVOCATE for MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. RULE. Ms. Mauna Bhatt, learned advocate waives service of notice of rule on behalf of the respondents. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the I.T. Act determining total income of ₹ 69,01,855/- vide order dated 28/03/2014. Issue No.1: As per Section 2(42A) of the Act, in the case of a share held in a company as capital asset for not more than 12 months is required to be treated as short term capital assets. If holding period is more than 12 months, it is considered as long term capital assets. As per Section 10(38) of the Act, any income arising from the transfer of a long term capital asset, being an equity share in a company where any income arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund where the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No.2) Act, 2004 comes into force; and such transaction is chargeable to securities transaction tax under that Chapter is exempted from payment of tax. As per Section 111A of the Act, any income arising from the transfer of a short-term capital asset, being an equity share in a company where any income arising from the transfer of a short-term capital asset, being an equity share in a company or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 135000 06/02/07 12434835 6 United International Ltd. 124000 11518740 22/03/2011 124000 06/02/07 11384240 310000 29091495 310000 28781495 The claim of the assessee was allowed by the Assessing Officer during the course of assessment proceedings on the basis of the assessee s submission filed vide letter dated 18/03/2014 and after verifying the entry in memorandum of transfer of share certificate. The shares were transferred in the name of assessee on 02/04/2008 as per entry noted on the back side of share certificate. It was noticed from assessment record that in respect of exempted share income, assessing officer vide his letter dated 07/03/2014 has inter alia asked the assessee to furnish details of; 1. Full name address alongwith copy of bills of through whom the shares were purchased, 2. Address of Chabildas Vor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company of BSE. 4. The last traded price recorded on BSE was ₹ 10.50 per share on 28/11/2000 whereas the assessee has claimed purchase of shares @ 1 per share. 5. D-mat account maintained by assessee showed that there was no opening balance in that account and d-mat share was accepted by depository on 02/12/2010 for 90,000 shares and on 16/03/2011 for 2,20,000 shares. 6. The assessee has d-mated shares numbering to 3,10,000 which were sold by off-market deal on later date. In view of reasons mentioned above, the claim of assessee that shares were purchased on 02/06/2007 was not tenable. It was required to be treated as purchase on 02/12/2010 for 90,000 and on 16/03/2011 for 2,20,000 shares as evident from the d-mat account. As such, period of holding was less than 12 months, the assessee was not entitled of exemption under Section 10(38) of the Act and liable to tax under Section 111A. Failure to do so resulted in under assessment of income of ₹ 2,87,81,495/-. I ssue No.2 As per Section 40(a)(ia) of the Act any interest payable to a person in excess of 5000 by an individual who was liable for tax audit in the immediately proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I have reason to believe that there is escapement of income of ₹ 2,87,81,495/- for issue no.1 and escapement of income of ₹ 90,00,000/- for issue no.2. Therefore, proceedings of Section 147/148 of the I.T. Act have been initiated. 5. The petitioner - assessee submitted the objections against the reasons recorded for reopening the assessment, which have been disposed of by the Assessing Officer not agreeing with the objections raised by the petitioner assessee. Hence, the petitioner assessee has preferred the present Special Civil Application under Article 226 of the Constitution of India challenging the impugned reassessment proceedings. 6. Shri R.K. Patel, learned advocate appearing on behalf of the petitioner assessee has vehemently submitted that in the present case in the scrutiny assessment the Assessing Officer considered the claim of the petitioner assessee in detail and considering the details furnished by the petitioner assessee, which were called by the Assessing Officer, the Assessing Officer finalized the original assessment. It is submitted that therefore reopening of the assessment would be nothing but change of opinion of the subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Assessing Officer, which was passed after scrutiny assessment and which was passed after calling for the relevant materials from the petitioner assessee, the Assessing Officer considering the purchase of shares of Unitech International Ltd. purchased in the year 2007 granted the exemption accordingly, and therefore, the subsequent reopening would tantamount to change of opinion and as held by the Hon ble Supreme Court and this Court in catena of decisions mere on change of opinion the reopening of the assessment is not permissible. At this stage, it is required to be noted that as such there is no tangible material available with the Assessing Officer in support of the claim to treat the purchase of the shares in the year 2010-11. On the contrary it is evident from the record that the petitioner assessee purchased the shares of Unitech International Ltd. in physical form in the year 2007 and the same were reflected /disclosed in his books of accounts produced with return of income in the earlier years, more particularly, in the preceding year of Assessment Year 2011-12. The aforesaid is evident from the material produced on the query raised by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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