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TMI Blog2022 (12) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act 1961 (here-in-after referred to as "the Act"). The assessee has filed the Cross Objection in the Revenue's appeal bearing ITA No. 168/Ahd/2019 for the Assessment Year 2008-2009. First, we take up the Cross objection filed by the assessee bearing CO No. 168/Ahd/2019 2. The assessee has raised following cross objection: Your appellant being dissatisfied with the order passed by the Commissioner of Income tax (Appeals) presents the cross objections against the same on the following amongst other grounds. 1.0 The CIT(A) erred in upholding validity of the order under section 143(3) r.w.s, 147 framed by the assessing officer. The assessee submits that the order under section 143(3) r.w.s. 147 being bad in law ought to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30th March 2013 which was served on assessee on 1st April 2013 for the reason that the income has escaped to the assessment. As per the AO the assessee engaged in the business of trading of shares & Securities at large scale (sum of sale amount of Rs. 24.92 Crore approx). However, the assessee claimed exempted long term capital gain for Rs. 2,29,13,255/- only on sale of bonus shares received in the immediate preceding year whereas the original share acquired by the assessee in immediate preceding year was sold in that year only immediately after credit of bonus share at profit. In the balance sheet for the year ending 31st March 2007 the assessee has shown investment of Rs. 1 crore in the shares of M/s Parvin Ratilal Shares and Stock Broke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the time limit of 4 year. The AO further held that the assessee engaged in trading of shares & securities at large scale for long time. The impugned claim of exempted long term capital was arising from sale of bonus shares whereas the original share against which bonus shares were allotted to the assessee was sold in immediate previous year which was treated as business transaction. Hence, the sale of bonus share in the year under consideration should also be treated as business transaction only. 6. Aggrieved assessee preferred appeal before the learned CIT(A) who upheld the validity of the assessment by observing as under: 5.3 I have perused the assessment order and found that the A.O. has furnished the copy of reasons recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the learned CIT(A), the assessee is in cross objection before us. 8. The learned AR for the assessee before us filed a paper book running from pages 1 to 136 and contended that the reopening was made by the AO under the provisions of section 147 of the Act without having any fresh material. As such, the AO on verification of the same set of books of accounts which were available during the original proceedings initiated the proceedings under section 147 of the Act which is nothing but change of opinion. According to the learned AR the proceedings under section 47 of the Act are not sustainable. On the other hand, the learned DR before us vehemently supported the order of the authorities below. 9. We have heard the rival conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost - value shown was in the balance-sheet. Therefore, the assessees's contention that these shares purchased for investment purpose is not acceptable and these bonus shares the Company got during the course of normal business of share trading, the shares held by it were to be treated as its stock-in-trade in the normal course of his business and not as a capital asset. Even some equity shares shown in B/s. as on 31/03/2006 (Guj.po wer, IBP & IDBlJ were sold nature of trade since the dominant intention was to earn profit by resale. The business transaction was given the colour of LTCG with an intention to evade tax. 9.1 From the above reasons recorded by the AO, it is revealed that the proceedings under section 147 of the Act were ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible material. The reasons mentioned in the notice for reassessment are based on mere change of opinion and therefore, the reopening of the assessment proceeding is not permissible in the facts and circumstances of the case. The aforesaid finding cannot be said to be perverse. For the aforementioned reasons, the substantial questions of law involved in this appeal are answered against the revenue and in favour of the assessee. 9.1 The principles laid down by the Hon'ble Karnataka High court and subsequently confirmed by Hon'ble Supreme Court in the case cited above are squarely applicable to the facts of the present case. Admittedly, the AO on verification of the same set of documents which were available during the original proceedings f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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