TMI Blog2020 (4) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... sons, the AO has observed that as per information received from the ITO, Ward-16(1), Mumbai, the assessee carried out transaction in shares/securities with M/s.Gold Star Finvest. This information is factually incorrect or not cross-verified by the AO before recording reasons. The assessee has not carried out its share/security transaction with Gold Star Finvest in respect of which capital gain arose to the assessee stand ultimately considered by the AO for denial of exemption under section 10(38) of the Act. Further, a perusal of the reasons would indicate that there is no coherence between the information available with the AO vis -vis transaction of the assessee, and formation of belief that income has escaped the assessment. These reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjection filed by the assessee and order of the AO rejecting the objection dated 22.2.2014 are placed on paper book from page no.1 to 14. The AO thereafter passed re-assessment order under section 143(3) r.w.s. 147 on 7.3.2014. The ld.AO has made addition of ₹ 43,03,195/- on the ground that the assessee has claimed long term capital gain of ₹ 43,03,195/- and claimed it as exempt under section 10(38) of the Act. According to the AO it is a bogus claim of the assessee and he made addition. Dissatisfied with reopening of the assessment, the assessee carried the matter in appeal before the ld.CIT(A). He has challenged reopening of the assessment as well as addition made on merit. The ld.CIT(A)has rejected both grounds of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could be ascertained that the notice issued under section 148 is within the limitation? He submitted that this notice is without jurisdiction. For buttressing his contentions, he made reference to the decision of Hon ble Gujarat High Court in the case of Bakulbhai Ramanlal Patel Vs. ACIT, 56 DTR 212 (Guj). He placed on record copy of this decision. 5. In his next fold of contentions, he submitted that in the reasons for reassessment, it is stated that there is transaction with Gold Star Finvest Securities Pvt Ltd., Mahasagar Securitis P.Ltd. which are engaged in providing accommodation entries in view of information supplied by the ITO, Ward 16(3)(1), Mumbai. The assessee has not carried out any transaction through these two entities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly considered rival submissions and gone through the record carefully. The reasons recorded by the AO and supplied to the assessee vide letter dated 28.5.2003 reads as under: ..As per the information received from the ITO Wd. 16(3)(1), Mumbai, assessee carried out transactions in share/ securities with m/s Gold Star Finvest Securities Pvt. Ltd. Further it was learnt that the said M/s Gold Star Finvest securities Pvt. Ltd. was engaged in fraudulent billing activities and was in this business of providing bogus speculation profit/ loss, STCG/LTCG /Loss, Shares applications money, commodity profit/ loss on commodity trading (through MCX) etc. In view of the non genuineness of the said transaction of the assessee, the assessee has prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Return of income. Therefore, I am satisfied that it is a fit case for initiating proceeding u/s.148 of the I.-T. Act....: 8. A perusal of the above reason would indicate that the AO has nowhere quantified the income escaped. The Hon ble jurisdictional High Court has considered identical reasons where no quantification of escaped income was made by the AO. Hon ble Court had considered issue about limitation provided under section 149(1)(b)of the Act. The discussion made by the Hon ble High Court in the case of Bakulbhai Ramanlal Patel Vs. ACIT (supra) in para-31 is worth to note. It reads as under: As regards the contention that the reasons do not reflect that the income having escaped assessment is more than rupees one lakh or lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case that income exceeded rupees one lakh has escaped assessment. No such finding or observation or reference has been made in the reasons extracted (supra). In the opening line of the reasons, the AO has observed that as per information received from the ITO, Ward-16(1), Mumbai, the assessee carried out transaction in shares/securities with M/s.Gold Star Finvest. This information is factually incorrect or not cross-verified by the AO before recording reasons. The assessee has not carried out its share/security transaction with Gold Star Finvest in respect of which capital gain arose to the assessee stand ultimately considered by the AO for denial of exemption under section 10(38) of the Act. Further, a perusal of the reasons would indica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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