TMI Blog2022 (1) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... was never furnished to petitioner at any point of time prior thereto. We have considered both the reasons and we do observe that the reasons as furnished to petitioner vide letter dated 28th September 2020 and the reasons as reproduced in the order dated 17th May 2021 rejecting petitioner s objections, are different. In the first set of reasons as furnished with letter dated 28th September 2020, it is stated that the long term capital loss cannot be disallowed as the transaction is not regarded as transfer within the meaning of Section 47(iv) and 47(v) since preference shares were acquired from Greatship India Ltd. Of course, the reasons also does not record that any income has escaped the assessment because it does not state the loss h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Y.-2015-2016. Petitioner replied to the said notice vide its letter dated 7th February 2021. The objections are rejected by an order dated 17th May 2021. Both the notice dated 17th March 2020 and the order on objection dated 17th May 2021 are impugned in this petition. Petitioner, inter alia, is engaged in the business of shipping, property development, financial operations, dealing in mutual funds and granting of loans and advances. Petitioner is regularly assessed to Income Tax. According to petitioner, notice issued under Section 148 is without jurisdiction for the following reasons: (i) The issue on which reopening of the concluded assessment is sought was examined in detail during the course of the regular assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and of this Hon ble Court and other Hon ble High Courts wherein the view has been taken that if the jurisdictional conditions are not satisfied, the assessment cannot be reopened. 2. Mr. Walve for respondents submitted that the issue as to why long term capital loss of ₹ 17,23,10,825/- should not be disallowed as transaction was not regarded as transfer within the meaning of Section 47(iv) and (v) of the Act, since the preference shares were acquired from the flagship company Greatship India Ltd. has not been proved by the Assessing Officer during the original assessment proceedings as is clear from the assessment order dated 29th December 2017, in which the Assessing Officer had clearly listed the items which has been prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and submitted that the notice issued under Section 148 was bad, illegal and without jurisdiction because (a) the assessment for the year under consideration was completed under Section 143(3) of the Act vide order dated 29th December 2017, after making detailed inquiries and after obtaining several details from petitioner, (b) the details of the transfer of preference shares were duly furnished in the return of income and explained during the course of assessment proceedings, and (c) reassessment has been resorted due to change of opinion of the same set of fact which was not permissible in law. Petitioner once again filed detailed objections which were disposed by an order dated 17th May 2021 which is also impugned in this petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Section 47(iv) and (v) of the Act. 5. On a plain reading of Section 47(iv) read with Section 47A of the Act, it is apparent that Section postulates that the capital asset which is the subject matter of transfer continues to remain in existence even after the transfer of capital asset. On the redemption of preference shares, the shares are cancelled and the capital asset is extinguished and ceased to exist and, therefore, in our view, the provisions of Section 47(iv) are not applicable to the transaction of redemption of preference shares. Transfer for the purpose of Section 47(iv) of the Act would mean transfer otherwise than by way of extinguishment of asset and rights therein. 6. Having considered the reasons, there is also no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was never furnished to petitioner at any point of time prior thereto. We have considered both the reasons and we do observe that the reasons as furnished to petitioner vide letter dated 28th September 2020 and the reasons as reproduced in the order dated 17th May 2021 rejecting petitioner s objections, are different. In the first set of reasons as furnished with letter dated 28th September 2020, it is stated that the long term capital loss cannot be disallowed as the transaction is not regarded as transfer within the meaning of Section 47(iv) and 47(v) since preference shares were acquired from Greatship India Ltd. Of course, the reasons also does not record that any income has escaped the assessment because it does not state the loss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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