TMI Blog2017 (5) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... DICIAL MEMBER This assessee s appeal for assessment year 2007-08 emanates against the CIT(A)-V, Baroda s order dated 12.05.2014, passed in case no. CAB/(A)V/179/13-14, in proceedings u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short the Act . 2. The assessee pleads the following substantive grounds: 1) The order passed u/s 250 on 12/05/2014 for A.Y. 2007-08 by CIT(A) -V, Baroda, confirming the reopening of the assessment u/s. 147 of the I.T.Act,1961 by AO and making the addition u/s 69 of the Act is wholly illegal and unlawful. 2) (i) The learned CIT(A) has grievously erred in law and on facts in ignoring the fact that the. learned AO had no reason to believe that income chargeable to tax had escaped assessment particularly after having received the appellant's reply in response to letter dt. 06-06- 2011 as regards to Audit query. ( ii) The learned CIT(A) has grievously erred in law and on facts in ignoring the fact that the learned AO had not disposed off the objections filed by the appellant by passing a speaking order and thereby not following the principles; set on by Hon'ble Supreme Court in the case of GKN Driveshafts (India) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ₹ 7,50,976/- on 19.07.2006 and 6000 shares for ₹ 5,89,393/- on 22.03.2007 through off market transactions. The assessee had claimed exemption of LTCG of ₹ 13,20,685/- u/s 10(38) of the I.T.Act. The above said transaction was off market transaction which was not eligible for claiming exemption u/s 10(38) of the Act. In view of the above, the AO had reasons to believe that the income chargeale to tax has escaped assessment to the extent of ₹ 13,20, 685/- for the year under consideration. The assessment was reopened u/s 147 of the I.T Act by recording reason for reopening, and accordingly notices u/s 148 of the IT Act was issued on 15.3.2011 and duly served upon the assessee . 5. The Assessing Officer accordingly issued Section 148 notice dated 15.03.2011. He then completed re-assessment in question on 30.11.2012 adding the abovestated amount of ₹ 13,20,685/- in respect of assessee s profit on sale of shares. All this resulted in impugned long term capital gains addition. 6. The assessee preferred appeal challenging validity of reopening as well as the above long term capital gains addition on merits. The CIT(A) rejects both these pleas in low ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, deduction under section 80G would not be allowable - Assessing Officer, therefore, reopened assessment - Tribunal and High Court held that reopening of assessment under section 147(b) was not permissible on basis of report given by Audit Department - Whether audit party had merely pointed out a fact which had been overlooked by Assessing Officer and this was not a case of information on a question of law -Held, yes - Whether reopening of case under section 147(b) on basis of factual information given by internal audit party was valid in law - Held, yes In view of these facts and the position of law, I am of the opinion that the AO had validly reopened the assessment u/s 147 of the IT Act. This ground of appeal is therefore, dismissed. 7. We further notice that the CIT(A) thereafter takes notice of assessee s concession made in course of lower appellate proceedings to treat the above share income as unexplained investments u/s.69 of the Act as follows: 6. The third ground of appeal is directed against the addition of ₹ 13,20,685/- made by the AO towards long term capital gain. While making this addition the AO observed as under: During course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res were sold out on 19.072006 for a consideration of ₹ 7,50,976/- and 6000 shares were sold out on 22.03.2007 for a consideration of ₹ 5,89,393/-. It was noticed that 36,100 shares of Talent Infoway Ltd. were purchased by the assessee at a total cost of ₹ 54,455/- on different dates. The total profit (LTCG) of ₹ 13,20,685/- was claimed by the assessee as exempt u/s10(38) of the I.T. Act. Shri J.P. Shah, CA contended during the course of hearing that the transactions were made through ICSE ( Inter connected Stock Exchange of India Ltd), however, he failed to prove the same with supporting proof and evidences. The AR of the assessee, vide order sheet entry dated 21.11.2012 was asked to furnish copies of contract Notes and proof and evidence of payment of security transaction tax in respect of the share transactions made by the assessee. However, the assessee failed to substantiate that she had paid security transaction tax on the above said transactions. Section 10(38) of the I.T. Act emphasis that ' in computing the total income of a previous year of any person, any income arising from the transfer of a long term capital asset, being an equity shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) We enclose contract notes showing date and time of transactions on the stock exchange. d) It is submitted that the documents on record sufficiently prove that the transactions were subject to securities transaction tax and hence we request Your Honour to delete the addition on this ground. 6.2 After going through the documents furnished by the appellant it was noticed that the appellant was claiming that the transactions were done on Interconnected Stock Exchange of India (ICSE) and the Securities Transaction Tax (STT) was paid in respect of these transactions. For verification of the claim of the appellant, a letter was written to ICSE asking them to certify whether the transactions were conducted through their exchange and whether STT was paid in respect of these transactions. Vide letter No. 13-14/ISE/833/SP dated 12.2.2014, the exchange informed as under:- As per the records it was found that no such trades were executed on ISE in the name of Hansaben H.Patel for the A.Y.2007-08, also note that since September 2003 no trades were executed on the trading Platform of ISE. Therefore, no Securities Transaction Tax was levied . In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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